The  Atlantic  Port 
Differentials 


The  Important  and  Official  Documents 
pertaining  to  the 


ADJUSTMENT  OF  FREIGHT  RATES 

Between 

The  West  and  the  North  Atlantic  Ports 
1877-1917 


With  Full  and  Complete  Index 
By 

JOHN  B.  DAISH,  A.  B.  L.,  L.  M. 

Member  of  the  District  of  Columbia  Bar^ 
Author  of  Procedure  in  Interstate  Commerce  Cases, ^^ 
etc.,  etc. 


W.  H.  LOWDERMILK  &  CO. 

Washington 


Copyriglit,  1918 
By  John  B.  Daish 


hi  h  J 


7)/U' 


TO  MY  FATHER 

UNDER   WHOSE   CONSTANT   INSTRUCTION 

BUSINESS  PRINCIPLES  WERE  INSTILLED  AND 

UNDER  W^HOSE  CONTINUAL  ENCOURAGEMENT 

THE  PRACTICE  OF  LAW  HAS 

BEEN  CONDUCTED 


\ 


463558 


CONTENTS 


Foreword i 

Introduction   vii 

Differential  Rate  Agreement,  April  5,  1877 1 

Report    on    Adjustment    of   Railroad    Transportation 

Rates  to  the  Seaboard  1881,  Albert  Fink 5 

Preamble  and  Resolutions  of  Trunk  Lines  Executive 

Committee,  appointing .  the  Thurman-Washburne- 

Cooley  Commission,  1882    65 

Report,  Thurman-Washburne-Cooley  Commission,  1882         69 
Matter  of  Export  Trade  of  Boston,   (1   I.  C.  C.  24), 

April  23,  1887  105 

Boston  Chamber  of  Commerce  v.  L.  S.  &  M.  S.  Ry.  et  al., 

(1  L  C.  C.  436)  February  15,  1888 " Ill 

The  Toledo  Produce  Exchange  v.  L.  S.  &  M.  S.,  and 

Kemble  v.  Same,  (5  I.  C.  C.  166)  April  6,  1892  ....       137 
New  York  Produce  Exchange  v.  B.  &  0.  R.  R.  et  al.,  (7 

I.  C.  C.  612)  April  30,  1898 157 

Kemble  v.  B.  &  A.  Ry.  et  ah,  (8  L  C.  C.  110)  March 

7,  1899 231 

Differential  Rates  to  and  from  North  Atlantic  Ports. 

Memorandum    of    Auditor,    Interstate    Commerce 

Commission,  May  12,  1904 243 

In  the  Matter  of  Differential  Freight  Rates  to  and  from 

the  North  Atlantic  Ports   (11  I.  C.  C.  13),  April 

27,  1905  283 

Saginaw  Board  of  Trade  v.  Grand  Trunk  Ry.  et  al,  (17 

I.  C.  C.  128),  June  8,  1909 " 343 

Board  of  Trade  of  Chicago  v.  Atlantic  City  Ry.  Co. 

(20  I.  C.  C.  504),  April  4,  1911 \  . /. 357 

Chamber  of  Commerce  of  the  State  of  New  York  v.  N. 

Y.  C.  &  H.  R.  R.  Co.  et  al.  (24  I.  C.  C.  55),  June 

4,  1912  377 

In  the  Matter  of  Import  Rates  (24  I.  C.  C.  78),  June 

4,  1912  403 

V 


vi  ATLANTIC  POET  DIFFERENTIALS. 

Chamber  of  Commerce  of  tlie  State  of  New  York  v.  N. 
Y.  C.  &  H.  R.  R.  R.  et  al.,  Supplemental  Report  (24 

I,  C.  C.  674),  October  14,  1912 409 

In  the  Matter  of  Import  Rates,  Supplemental  Report 

(24  I.  C.  C.  678),  October  14,  1912 415 

Chamber  of  Commerce  of  the  State  of  New  York  v.  N. 
Y.  C.  &  H.  R.  R.  Co.  et  uL,  Supplemental  Report  on 

Rehearing  (27  I.  C.  C.  238),  June  5,  1913 419 

In  the  matter  of  Export  Rates,  Supplemental  Report 

on  Rehearing  (27  I.  C.  C.  245),  June  5,  1913 429 

Appendix : 

Part  of  First  Annual  Rei)ort  of  the  Internal  Com- 
merce of  the  United  States,  by  Joseph  Nimno,  Jr., 

Chief  of  Division  of  Internal  Commerce 435 

Inter-  and  Intra-Territorial  Bases  of  Rates  in  Official 
Classification  and  New  England  Territories,  in- 
cluding the  Atlantic  Port  Differentials 463 

Table  of  Cases  Reported 487 

Table  of  Cases  Cited 489 

Index    491 


FOREWORD 

In  tlie  preparation  of  this  book,  the  author  has  not  lieen  un- 
mindful of  the  fact  that  on  several  occasions  he  has  had  the 
honor  to  represent  as  attorney  one  of  the  ports  vitally  inter- 
ested in  the  subject  of  Atlantic  Port  Differentials  and  on 
other  occasions  interests  subject  to  freight  rates  based  on 
differentials.  He  has  reason,  therefore,  to  studiously  avoid 
the  insertion  in  this  work  of  any  biased  excerpts  from  docu- 
ments or  of  his  personal  views,  and  to  contine  himself  en- 
tirely to  the  historical  method.  This  has  necessitated  the 
printing  of  documents  in  full,  except  where  matter  occurs 
wholly  irrelevant  to  the  subject. 

Such  complete  reproduction  of  documents  may  seem  unnec- 
essary and  tedious  on  account  of  occasional  repetition  but 
the  reader  will  find  connected  with  the  subject  of  Atlantic 
Port  Differentials,  particularly  as  shown  in  the  older  and  rare 
documents,  a  large  volume  of  transportation  fact  and  law, 
which  well  repays  the  consideration  and  study  given  it. 

Acknowledgment  is  made  of  the  courtesy  of  The  Lawyers' 
Co-Operative  Publishing  Company  of  Rochester,  N.  Y.,  for 
permission  to  use  its  headnotes  in  several  of  the  reports  of 
the  Interstate  Commerce  Commission.  Also  to  Mr.  Charles 
England,  of  Baltimore,  for  valuable  suggestions  and  advice 
concerning  the  work. 

The  Authoe. 

Washington,  October,  1917. 


Vll 


INTRODUCTION 

Tlie  importance  of  the  relation  of  freight  rates  which  shall 
prevail  as  between  the  North  Atlantic  ports  can  hardly  be 
overestimated.  The  volume  of  tonnage  which  moves  under 
these  rates,  the  amount  and  kind  of  business  which  the  several 
ports  can  and  do  jirofitably  handle,  the  tonnage  of  the  car- 
riers to  particular  ports  and  many  other  matters  are  largely 
influenced,  if  not  governed,  thereby.  Historically,  the  present 
rate  fabric  is  the  oldest  iu  the  country;  it  is  the  result  of  many 
rate  wars   (now  happily  ended),  compromises,  competitions, 

arbitrations  and  strifes  of  carriers  and  ports. 

*         *         * 

The  beginning  of  low  rail  rates  between  the  West  and  the 
Atlantic  ports  came  primarily  from  a  report  made  by  a  num- 
ber of  influential  citizens  of  Baltimore  on  February  19,  1827, 
appointed  a  week  before,  on  the  feasibility  of  a  steam  rail- 
road from  that  city  to  the  West.*  The  legislature  of  Mary- 
land on  the  28tli  of  the  same  month  chartered  the  Baltimore 
and  Ohio  Railroad.  The  corner  stone  of  this  carrier  was  laid 
by  the  venerable  Charles  Carroll,  of  CarroUton,  the  only  sur- 
viving signer  of  the  Declaration  of  Independence,  July  4, 
1828.  Harpers  Ferry  was  reached  in  1834,  Cumberland  in 
1842,  the  Ohio  River  in  1853,  and  Chicago  in  1874.  Since  the 
last  mentioned  date  the  Baltimore  and  Ohio  has  been  a  con- 
sistent advocate   of  less   rates  between  Baltimore   and  the 


*The  report  was  exhaustive,  consisting  of  thirty-four  printed  pages;  it  dealt 
with  the  then  existing  commerce  of  the  port  of  Baltimore,  referred  particularly  to 
commerce  with  the  Susquehanna  Valley  and  pointed  out  the  possibilities  of  trade 
with  the  West;  the  advantageous  location  of  Baltimore  was  stated  in  the  follow- 
ing language: — 

"But  important  as  this  trade  is  to  Baltimore  [trade  with  the  Susquehanna 
Valley],  it  is  certainly  of  minor  consideration,  when  compared  to  the  imnienfe 
commerce  which  lies  within  our  grasp  to  the  West,  provided  we  have  the  enter- 
prise to  profit  by  the  advantages  which  our  local  situation  gives  us  in  reference 
to  that  trade.  Baltimore  lies  200  miles  nearer  the  navigable  waters  of  the  West 
than  New  York  and  about  100  miles  nearer  to  them  than  to  Philadelphia,  to  which 
may  be  added  the  important  fact  that  the  easiest,  and  by  far  the  most  practicable 
route  through  the  ridges  of  mountains  which  divide  the  Atlantic  from  the  western 
waters,  is  along  the  depression  formed  by  the  Potomac  in  its  passage  through 
them.  *  *  *  The  only  point  from  which  we  have  anything  to  apprehend  is 
New  Orleans;  with  that  city,  it  is  admitted  we  must  be  content  to  share  this 
trade  because  she  will  always  enjoy  a  certain  portion  of  it." 

ix 


X  ATLANTIC  PORT  DIFFERENTIALS. 

West  than  prevail  for  the  northern  ports  — and  less  rates, 
either  on  a  percentage  of  distances  or,  in  compromise,  by 

agreed  and  fixed  differentials. 

*         *         * 

The  principle  of  making  less  rates  to  certain  Atlantic  ports 
and  the  crystallization  in  1877  of  fixed  differentials  as  the 
measure  of  differences  in  rates  seems  to  have  been  duly  ap- 
preciated by  the  then  railroad  fraternity.  The  Differential 
Eate  Agreement  of  April  5,  1877,  was  one  of  the  causes  of  and 
prominent  in  an  investigation  by  the  Hepburn  Committee  ap- 
pointed by  the  New  York  Legislature.*  Before  this  Committee, 
as  is  shown  by  their  testimony,  the  railroad  officials  justified 
the  differences  in  rates  to  the  ports  by  fixed  amounts. 
(Proceedings  of  the  Special  Committee  on  Railroads,  appoint- 
ed under  a  resolution  of  the  Assembly  to  investigate  alleged 
abuses  in  the  Management  of  Railroads  chartered  by  the 
State  of  New  York.    New  York,  1879.) 

The  President  of  the  New  York  Central  road  (Mr.  W.  H. 
Vanderbilt),  when  asked  concerning  the  Grand  Trunk,  said: 

''They  are  trying  to  compete  with  us  on  200  miles  greater 
distance — the  same  as  you  would  have  us  do  with  the  Balti- 
more &  Ohio"  (p.  1258). 

Later  he  said,  ''I  think  the  railroads  have  done  their  full 
share  towards  the  prosperity  of  the  commercial  interests  of 
the  State  and  the  City  of  New  York,  from  the  very  fact  we 
are  transporting  goods  in  competition  with  other  roads,  200 
miles  further  for  two  cents  more— 300  miles  further  than 
Baltimore  is ;  and  the  great  demand,  as  I  understand,  and  the 
principal  demand,  made  by  the  merchants  of  the  City  of  New 
York  was,  that  we  should  do  the  business  and  carry  their 
goods  to  New  York  at  the  same  price  they  would  to  Baltimore 
and  Philadelphia"  (p.  1675). 

The  President  of  the  New  York,  Lake  Erie  &  Western  Rail 
way  Company  (Mr.  H.  J.  Jewett),  was  interrogated: 

"Haven't  you  agreed  on  behalf  of  the  Erie  Railway  Com- 


*Special  Committee  on  Railroads  appointe<l  under  resolution  of  the  Assembly  of 
New  York,  February  28,  1879,  to  investigate  alleged  practices  in  the  management 
of  railroads  chartered  by  the  State  of  New  York.  A  B.  Hepburn  was  the  Chair- 
man, 


INTRODUCTION.  XI 

pany  to  an  arbitrary  rate  which  makes  a  constant  difference 
as  against  New  York  in  favor  of  Philadelphia  and  Baltimore 
of  respectively  2  and  3  cents  a  hundred!" 

He  replied:  ''Yes,  sir;  we  have  made  that,  and  thought 
we  were  very  successful  when  we  got  it  reduced  from  6,  8 
and  10"  (p.  1489). 

Mr.  Jewett  was  asked,  "Is  it  true  that  New  York  City  is 
now  losing  its  business?"  and  he  replied,  "I  think  it  is." 

Question:  "By  reason  of  the  shorter  distance  between 
Baltimore  and  Philadelphia  and  western  centres?"  He  re- 
plied, "By  reason  of  the  efforts  of  those  cities  to  increase 
their  trade  in  building  it  up,  by  reason  of  the  fact  that  their 
distance  does  reduce  the  actual  expense,  and  by  reason  of  the 
cooperation  l)etween  other  railroads  and  those  cities  in  build- 
ing it  up,  and  by  reason  of  the  fact  that  their  distance  does 
reduce  the  actual  expense"  (p.  1493). 

The  Vice-President  of  the  Erie  (George  R.  Blanchard), 
who  had  formerly  been  connected  with  the  Baltimore  and 
Ohio,  testified  before  the  Committee  as  follows: 

"Disregarding  all  matters  of  grade,  curvature,  labor,  iron, 
bridges,  tunnels,  and  everything  else,  here  are  to-day  the 
actual  results  of  the  rates  as  they  stand  at  this  moment  at 
thirty-five  cents  per  one  hundred  pounds  from  the  West  to 
the  City  of  New  York.  Then  disregarding  all  this  trash  about 
the  amount  of  their  grades  and  their  curvature,  etc.,  is  there 
anybody  who  can  say  that  with  coal  delivered  to  the  Balti- 
more &  Ohio  at  ninety  cents  per  ton,  while  our  lowest  price 
is  two  dollars,  that  with  a  difference  in  their  favor  of  200 
miles  of  distance ;  that  with  cross-ties  purchased  in  the  moun- 
tains of  West  Virginia  at  one-half  the  money  we  have  to  pay, 
that  with  all  these  differences  and  disabilities,  we  can  carry 
this  extra  distance  for  nothing  and  then  show  the  same  result 
per  ton  per  mile  on  the  whole  distance?  It  is  the  most  mis- 
leading suggestion  that  can  possibly  be  submitted  to  the  Com- 
mittee" (p.  3193). 

Concerning  suggested  equal  rates  to  New  York  and  Balti- 
more on  flour,  Mr.  Blanchard  said : 

"We  are  not  called  upon  by  any  mercantile  principle  or 
usage  to  carry  that  extra  distance  for  nothing,  and  there  are 


Xii  ATLANTIC  PORT  DIFFERENTIALS. 

no  272  miles  of  railroad  that  can  be  bnilt  for  nothing,  can  be 
worked  for  nothing,  that  shonld  be  given  to  the  public  for 
nothing,  any  more  than  that  the  owner  of  the  warehouse  op- 
posite this  building  should  go  to  Baltimore,  find  out  what  the 
rent  of  a  similar  warehouse  is,  and  fix  his  price  upon  the  rent 

basis  at  Baltimore"  (p.  3175). 

*         *         * 

The  rate  question  most  frequently  considered  in  this  coun- 
try has  been  the  relation  of  rates  between  Xortli  Atlantic 
ports  and  the  West.  At  various  times  and  in  various  ways 
the  question  has  been  considered  and  determined,  alway*;  with 
substantially  the  same  result. 

To  state  the  proposition  as  it  was  stated  by  Commissioner 
Prouty  in  1905,  (In  Matter  of  Dift'erential  Freight  Rates  to 
and  from  North  Atlantic  Ports,  11  I.  C.  C.  13,  61,  post  324)  :— 

''The  question  itself  is  readily  comprehended.  That  sec- 
tion bounded  on  the  east  by  a  line  drawn  from  Pittsburgh  to 
Buffalo,  on  the  south  by  the  Ohio  Eiver,  on  the  west  by  the 
Mississippi  River  and  on  the  north  by  the  Great  Lakes  and 
a  line  drawn  west  from  Chicago  to  Dubuque  is  known  is  dif- 
ferential territory.  Rates  between  points  in  this  territory 
and  Xew  York  City  are  based  upon  the  Chicago-Xew  York 
rate;  that  is,  the  rate  between  any  point  in  this  territory  and 
Xew  York  is  either  the  same  as  the  Chicago  rate  or  a  certain 
percentage  of  that  rate.  To  other  points  upon  the  Atlantic 
seaboard  the  rate  is  higher  or  lower  than  that  to  Xew  York 
by  a  given  number  of  cents  per  hundred  pounds.^  Rates  upon 
all  classes  and  all  commodities,  with  the  excej^tion  of  grain 
and  iron  articles,  are  2  cents  lower  to  Phihidelphia  and  3 
cents  lower  to  Baltimore  than  to  Xew  York.  To  Boston  rates 
are  the  same  as  to  Xew  York  on  export  traffic  while  on  do- 
mestic traffic  they  are  higher  by  arbitrary  amounts  ranging 
from  7  cents  per  hundred  pounds  on  first  class  to  2  cents 


§Fixe(;l  differences  above  a  base  rate  are  not  infrequently  rlenoniinated  "arbi- 
traries. "     See  Appendix,  p.  463  et  seq. 

The  term  "differentials"  is  often  used,  but  without  authority,  to  mean  nothing 
more  than  a  difference;  such  use,  as  indicated,  is  highly  imjiroper  because  the 
term  differentials  necessarily  implies  the  result  of  competition  while  a  mere  dif- 
ference implies  nothing  but  a  mathematical  process.  Custom  seems  to  justify  in 
certain  localities  calling  the  difference  in  rates  between  carload  and  less-than- 
carload  on  the  same  article  ' '  differentials. ' ' 


IXTRODUCTION'.  XHl 

on  sixth  class  and  most,  if  not  all,  commodities.  These 
arbitrary  ditferences  above  or  below  the  Xew  York  rate  are 
termed  in  this  proceeding  differentials." 

*  *         * 

In  addition  to  the  ditfentials  above  referred  to  there  are 
and  have  been  differentials  applicable  to  ex-lake  grain  traffic 
— traffic  coming  by  water  to  the  Eastern  lake  ports  and  thence 
by  rail  to  the  Atlantic  seaboard.  These  differentials  have  in 
the  competition  of  carriers  and  localities  become  of  great  im- 
portance, not  only  becanse  of  these  rivalries  bnt  also  because 
of  the  volume  of  tonnage  of  grain  moving  from  the  Eastern 
lake  ports  by  rail.  The  course  of  these  differentials  is  shown 
in  the  Memorandum  of  the  Auditor.  Interstate  Commerce 
Commission  {post.  p.  243).    The  present  ex-lake  diff'erentials 

appear  in  the  Aj^pendix. 

*  *         * 

The  making  of  rates  on  fixed  differentials  between  points 
is  not  at  all  unusual,  particularly  where  rates  are  made  on 

the  group  or  zone  system.* 

*  #         * 

While  there  is  authority  for  referring  to  the  amounts  by 
which  rates  are  determined  for  Boston,  Philadelphia  and 
Baltimore  over  (in  the  case  of  Boston)  and  under  (in  the  case 
of  Philadelphia  and  Baltimore)  the  Xew  York  rate,  the  term 
differential  or  differential  rates  is  also  applied  to  the  rates 
applicable  after  the  process  of  addition  or  subtraction  has 
been  accomplished  and  as  well  to  the  schedules  of  rates  from 
and  to  the  seaboard  via  so-called  differential  routes,  all  rail, 
ocean-and-rail,  rail-and-lake  and  lake-and-rail.  A  differential 
route  has  been  aptly  described  as  a  route  with  a  disability, 
meaning  thereby  that  the  route  by  reason  of  length  of  line  or 
other  condition  is  not  able  to  give  the  service  which  the  so- 
called  standard  lines  afford. 

*  *         * 

While  the  subject  of  the  relation  of  rates  between  the  four 
Atlantic  ports,  Xew  York.  Boston.  Philadelphia  and  Balti- 
more, had  for  some  vears  been  a  matter  of  controversv.  the 


■^See  Appendix,  p.  463  et  seq. 


Xiv  ATLANTIC  POET  DIFFEEENTIALS. 

corner  stone  of  differential  rates  is  to  be  found  in  the  Differ- 
ential Rate  Agreement  of  April  5,  1887  {post.  p.  1).  The 
Interstate  Commerce  Commission  does  not  recognize  as  law- 
ful the  provisions  of  this  agreement  {post.  p.  401,  425)  but  its 
terms  and  conditions  and,  as  well  no  doubt,  its  purposes,  have 
(to  say  the  least)  been  respected.  Each  time  there  has  been 
a  decision,  as  the  result  of  an  arbitration,  formal  proceeding 
before,  or  general  investigation  by,  the  Interstate  Commerce 
Commission,  this  document  has  served  as  a  pole  star  for  the 

deciding  party  or  body. 

*         *         * 

The  original  difference  in  rates  between  the  ports  began,  so 
far  as  the  customary  record  is  concerned,  in  1869,  at  which 
time  the  agreed  differential  in  favor  of  Baltimore  under  New 
York  on  grain  was  10  cents  per  100  pounds.*     In  1870,  the 


*The  following  excerpt  from  the  testimony  of  Mr.  George  R.  Blanchard  before 
the  Hepburn  Committee  in  1878  is  indicative  of  the  rate  situation  of  the  time,  as 
well  as  showing  the  differences  prevailing  between  the  Atlantic  ports: 

' '  Prior  to  1875  the  westbound  through  rates  were  made  ten  cents  on  first  class 
ten  on  second,  ten  on  third,  eight  on  fourth,  and  five  cents  on  fifth  class,  less  from 
Philadelphia  than  the  same  classes  were  charged  at  from  New  York ;  at  the  same 
time  the  Baltimore  differences  were  under  New  York  twenty-five  cents  on  first 
class,  twenty  cents  on  second,  fifteen  on  third,  ten  on  fourth  and  ten  on  special. 

Q.  Were  they  that  amount  lower?  A.  That  amount  lower  on  each  class  per 
hundred  pounds  than  the  rates  from  New  York.  As  to  Chicago  and  the  northwest, 
from  Baltimore  they  were  fifteen  on  first  class,  ten  on  second,  ten  on  third,  eight 
on  fourth,  and  five  on  special;  and  I  here  wish  to  say  that  while  upon  the  Balti- 
more &  Ohio  Eailroad,  I  paid  no  attention  whatever  to  these  differences,  but  on 
many  classes  of  dry  goods  made  the  difference  fifty  cents  a  hundred  under  New 
York,  or  whatever  we  could  get ;  we  had  no  schedule  of  differences,  and  we  had 
no  rule  of  differences  established,  but  when  we  got  the  tariff  of  the  New  York 
roads  we  simply  sat  down  and  made  our  rates  what  we  pleased;  because  there 
was  no  agreement  and  no  condition  to  the  contrary.  I  came  to  New  York  at 
different  times  while  I  was  connected  with  the  Baltimore  &  Ohio  Railroad,  and 
demanded  of  the  New  York  roads  a  percentage  difference  based  upon  mileage, 
because  I  believed  at  that  time  that  the  Baltimore  &  Ohio  Eailroad  was  entitled 
to  it,  and  as  far  back  as  prior  to  1872,  I  was  in  every  case  resisted  in  that  de- 
mand by  every  one  of  the  New  York  railroads.  In  the  spring  of  1875  it  was  ar- 
ranged that  to  points  on  and  north  of  the  Fort  Wayne  Road  the  difference  in 
favor  of  Philadelphia  should  bear  a  percentage  of  difference  instead  of  a  fixed 
difference,  and  Philadelphia  was  allowed  nine  per  cent,  less  than  New  York, 
which  upon  a  dollar  rate  would  be  nine  cents,  and  Baltimore  thirteen  per  cent.; 
south  of  the  Fort  Wayne  Eailroad,  where  the  advantage  of  distance  was  greater  by 
way  of  Pennsylvania,  Philadelphia  liad  an  allowance  of  ten  per  cent.,  and  Balti- 
more fourteen  per  cent.  This  continued  until  the  agreement  of  the  5th  of  April, 
1877,  for  the  adjustment  of  the  differences  between  the  seaboard  cities."  (3040- 
3041.) 


INTRODUCTION.  XV 

difference  was  reduced  to  5  cents  per  100  pounds  following 
a  war  of  rates.  This  difference  continued  up  to  1876  upon 
grain  and  the  lower  classes  of  freight.  While  there  was  an 
agreed  difference  to  Baltimore  of  10  cents  per  100  pounds 
on  first,  second  and  third  class  freight,  it  is  uncertain  what 
were  the  then  rates  to  Philadelphia  and  Boston. 

A  westbound  tariff  of  Xovember,  1875,  showed  differences 
under  New  York  as  follows : 


Class. 

1st 

2d 

3d                   4tb 

Special 

Baltimore,    

Philadelpliia,    

10c 

7c 

9c 

7c 

8e 
6c 

6c 
4c 

5c 
3c 

In  1876  the  system  of  making  stated  differences  in  rates 
based  upon  the  New  York  rates,  was  abandoned  and  there  was 
put  in  effect  on  April  13th  a  tariff  which  was  based  upon  the 
relative  distances  of  the  Atlantic  i^orts  from  Western  com- 
mon points. §  This  plan  made  rates  from  Baltimore  to  Chi- 
cago 13  per  cent,  and  to  Philadelphia  10  per  cent,  less  than  to 
New  York;  from  Cincinnati,  the  percentages  were  greater. 
This  agreement  lasted  but  a  short  time  when  the  New  York 
Central  and  Erie  Railway  withdrew  therefrom,  and  a  war  of 
rates  followed,  lasting  until  July  1, 1877,  when  the  Differential 

Rate  Agreement  (post.  p.  1)  took  effect. 

*  *         * 

Under  the  Differential  Rate  Agreement,  eastbound  rates  to 
Baltimore  were  3  cents,  and  to  Philadelphia  2  cents,  less  than 
to  New  York.  Westbound  freight  from  Baltimore  was  8  cents 
on  the  first  two  classes,  3  cents  on  the  third  and  fourth  classes, 
and  from  Philadelphia  6  cents  on  the  first  two  classes  and  2 
cents  on  the  third  and  fourth  classes,  less  than  from  New 

York.    Rates  to  Boston  were  to  be  no  less  than  to  New  York, 

*  *         * 

Subject  to  the  fact  that  after  1877  there  Avere  numerous 
rate  wars  of  greater  or  less  duration  and  severity,  and  sub- 
ject to  grave  doubt  whether  or  not  the  agreed  differentials 


§See  Mr.  Blanchard's  testimony  before  the  Hepburn  Committee,  quoted  in  the 
previous  note. 


Xvi  ATLANTIC  POET  DIFFERENTIALS. 

were  maintained,  the  arrangement  under  tlie  Differential  Eate 
Agreement  Jastod  until  1881,  at  which  time  the  several  ports 
became  very  restive  and  the  carriers  submitted  the  matter 
to  Albert  Fink,  then  Commissioner  of  the  Trunk  Lines.  The 
Fink  report  {post  .p.  5)  was  such,  that  for  a  brief  time  the 
main  portions  of  the  Differential  Rate  Agreement  continued 

in  force  and  effect. 

*  *         * 

The  merchants  at  the  several  ports  seemed  to  have  been 
dissatisfied  with  the  report  of  Mr.  Fink,  and  the  Trunk  Lines, 
apparently  with  a  view  of  permitting  the  mercantile  interests 
of  the  several  ports  to  jDresent  their  respective  claims  concern- 
ing the  relation  of  rates,  submitted  the  matter  in  1882  to  an 
Advisory  Commission  consisting  of  Hon.  Allen  G.  Thurman, 
Hon.  E.  B.  Washburne,  and  Hon.  Thos.  M.  Cooley,  (post  p. 
65). 

After  extended  hearings  the  Advisory  Commission  sub- 
mitted its  rei:)ort  [post.  09).  As  a  result  of  this  report,  af- 
firming the  Differential  Rate  Agreement,  the  situation  con- 
tinued substantially  the  same  as  it  had  theretofore  been,  sub- 
ject to  the  question  whether  or  not  the  differentials  were 

actually  maintained. 

*  *         * 

On  the  organization  of  the  Interstate  Commerce  Commis- 
sion, the  number  of  classes  of  freight  was  increased  from 
four  to  six.  The  differentials  to  Philadelphia  and  Baltimore 
which  had  prevailed  upon  articles  taking  third  and  fourth 
class  were  made  applicable  to  classes  five  and  six,  and  com- 
modities. Since  the  organization  of  the  Interstate  Commerce 
Commission,  it  has  had  before  it,  on  several  occasions,  the 
question  of  these  differentials;  the  important  decisions  ap- 
pear herein.* 

Since  1887,  there  has  been  no  change  in  the  amount  of  the 
differentials  on  classes.  In  1899,  the  carriers  reduced  the  dif- 
ferentials on  export  grain  by  one-half,  so  that  the  differential 
for  Baltimore  was  one  and  one-half  cents  and  for  Philadel- 


*It  is  not  too  much  to  say  that  tbe  important  matter  of  port  differentials  hav- 
ing been  settled  by  a  "commission"  and  with  satisfaction  to  all  interests,  this  fact 
had  great  influence  in  creating  the  Interstate  Commerce  Commission. 


INTRODUCTION.  XVll 

pliia  one  cent  (ijost,  p.  247).  Certain  reductions  were  also 
made  in  1904  in  the  differentials  on  iron  and  steel  articles  east 
bonnd.  As  a  result  of  the  1905  controversy,  the  differential  on 
flour  was  reduced  from  three  cents  to  two  cents  at  Baltimore 
and  from  two  cents  to  one  cent  at  Philadelphia  {post,  p.  334). 

The  course  of  ex-lake  grain  rates  has  been  erratic,  as  will 
appear  from  an  examination  of  their  history  {post,  p.  249,  et 
seq.).  At  present  the  ex-lake  differential  under  New  York  on 
export  grain  is  Yio  cent  to  Philadelphia  and  Baltimore,  except 
barley,  Ko  cent;  Boston  has  New  York  rates.  On  domestic 
ex-lake  grain,  rates  are  the  same  to  all  ports,  except  Boston, 

to  which  differentials  over  New  York  apply.* 

*         *         * 

By  consent  of  the  carriers^  the  rates  to  and  from  Montreal 
and  points  in  Differential  Territory  are  on  the  Philadelphia 
basis;  similarly  the  rates  to  and  from  Norfolk  and  Newport 
News  are  on  the  Baltimore  basis.  None  of  the  three  places 
mentioned  were  considered  in  the  Differential  Rate  Agree- 
ment, because  at  that  time  they  were  not  factors  in  the  export 
and  import  trade. 

The  differentials  apply,  whatever  may  be  the  rate.  If  the 
New  York-Chicago  first-class  rate  is  75  cents  (as  it  was  for 
many  years)  the  rates  from  the  other  ports  are  ascertained 
by  means  of  the  differential  applicable  to  each  port.  The 
present  first  class  rate  New  York-Chicago  is  90  cents,  and  rates 
for  other  ports  are  ascertained  by  the  proper  differentials.! 
In  other  words,  given  the  New  York  rate,  the  rate  to  or  from 
the  other  Atlantic  ports  is  ascertained  through  the  simple 
mathematical  process  of  subtraction  or  addition. 

Not  only  do  the  differentials  apply  to  the  sea  ports  but  they 
also  fix  the  rates  for  certain  deliminated  territory  adjacent  to 
the  sea  ports,  which  territories  are  respectively  denominated 
''Boston  rate  points,"  ''Philadelphia  rate  points"  and  "Bal- 
timore rate  points." 


*Wlieat  1.6  c;    corn,  2.4e;    rye,  1.8c;    oats,  .5c;    flaxseed,  1.8c;    barley,  1.3c. 
§The  present  rates  between  Chicago  and  New  York  are  for  the  six  classes,  as 
follows:    90-79-60-42-36-30. 


xvili  ATLANTIC  POET  DIFFERENTIALS. 

In  any  consideration  of  the  relation  of  rates  between  the 
North  Atlantic  ports,  the  first  question  which  arises  is  whether 
or  not  there  should  be  any  difference.  If  it  be  resolved  in  the 
affirmative,  the  question  then  arises  how  shall  such  difference 
be  made ;  shall  it  be  determined  to  have  the  difference  a  fixed 
one  or  shall  the  amount  vary  according  to  some  stated  condi- 
tion! If  it  be  determined  in  the  negative,  the  question  then 
arises  shall  the  New  York  rate  be  reduced  to  the  level  of  the 
lowest  rate  prevailing  to  the  seaboard  or  shall  the  lowest  rate 
and  all  intermediate  rates  be  increased  to  the  New  York  basis? 
It  will  readily  be  seen  that,  however  the  initial  question  may  be 

decided,  serious  complications  must  arise  in  the  execution  of  it. 

*  *         * 

One  might  think  that  the  interests  of  the  several  Trunk 
Lines,  each  striving  to  secure  the  utmost  traffic  for  its  port, 
would  make  the  question  of  rates  thereto  largely  local  and 
also  that  the  interest  of  a  particular  port  would  be  identical 
with  the  interests  of  the  carriers  serving  it.  Such,  however, 
is  not  the  case.  The  growth  and  complexity  of  railroad  busi- 
ness, the  making  of  many  routes  (through  some  of  which  each 
Trunk  Line  or  System  serves  directly  or  indirectly  each  and 
all  of  the  ports)  have  made  the  matter  of  the  relation  of  rates 
to  and  from  the  ports  a  national  question.§  The  manufacture 
of  finished  products  at  the  seaboard  from  raw  materials  se- 
cured in  the  West,  the  equipment  of  the  ports  for  particular 
and  special  kinds  of  business,  and  the  establishment  of  ocean 
lines  to  certain  destinations,  in  addition  to  the  creation  of  new 
routes  above  referred  to,  have  often  made  the  interests  of 
a  port  adverse  to  the  interests  of  the  carriers  directly  serv- 
ing it.* 

*  *         * 

There  is  a  close  connection  between  the  Percentage  Map 
{post,  p.  343),  applicable  to  rates  between  Central  Freight 
Association  Territory,  and  differentials  to  and  from  the  At- 
lantic seaboard.  Bates  between  Percentage  points  in  the  west 
and  New  York  are  ascertained  by  applying  the  proper  per- 


§See  Fink  Beport,  post  p.  75. 
*See  Appendix,  p.  443,  et  se(^. 


INTRODUCTION.  XIX 

centage  to  tlie  Chicago-New  York  rates ;  rates  for  other  ports 
are  the  customary  differentials  under  (in  the  case  of  Boston 
over)  the  rates  so  ascertained.  The  adoption  of  the  Percent- 
age Map  by  the  Baltimore  and  Ohio  followed  the  refusal  of 
the  New  York  lines  to  longer  permit  Baltimore  rates  to  be 
based  on  relative  distances  to  New  York  (see,  ante,  p.  xv,  and 
post,  p.  345),  and  was  substantially  concurrent  with  the  Dif- 
ferential Rate  Agreement. 

The  history  of  the  rates,  classes  and  principal  commodities, 
can  be  traced  in  the  Memorandum  of  the  Auditor,  Inter- 
state Commerce  Commission  {post,  p.  243).  The  present  dif- 
ferentials, as  well  as  method  of  making  inter-  and  intra-terri- 
torial  rates  for  New  England,  Trunk  Line  and  Central  Freight 
Association  territories,  will  be  found  in  the  order  of  the  Inter- 
state Commerce  Commission,  Five  Per  Cent.  Case,  January 
4, 1915,  reproduced  in  the  Appendix  hereof. 


DIFFERENTIAL    RATE    AGREEMENT 
APRIL  5,  1877. 


MEMORANDUM  OF  AGREEMENT,  made  this  5tli  day  of  April, 
A.D.  1877,  between  the  New  York  Central  and  Hudson 
River  Railroad  Company,  the  Erie  Railway  Company,  by  H. 
J.  Jewett,  Receiver,  the  Pennsylvania  Railroad  Company, 
and  the  Baltimore  &  Ohio  Railroad  Company,  witnesseth: 

To  avoid  all  future  misunderstandings  in  respect  to  the  geo- 
graphical advantages  or  disadvantages  of  the  Cities  of  Baltimore, 
Philadelphia  and  New  York,  as  affected  by  rail-and-ocean  trans- 
portation, and  with  the  view  of  effecting  an  equalization  of  the 
aggregate  cost  of  rail  and  ocean  transportation  between  all  com- 
petitive points  in  the  West,  Northwest  and  Southwest,  and  all 
domestic  or  foreign  ports  reached  through  the  above  cities,  it  is 
agreed : 

FIRST. — That  in  lieu  of  the  percentage  differences  heretofore 
agreed  upon,  there  shall  be  fixed  differences  upon  the  rates  on 
all  Eastbound  traffic  from  all  competitive  points  beyond  the 
western  termini  of  the  Trunk  Lines,  whether  on  freight  shipped 
for  local  consumption  or  shipped  locally  and  afterwards  exported 
or  shipped  for  direct  export.  These  differences  shall  be  as  fol- 
lows : 

Three  (3)  cents  less  per  hundred  to  Baltimore,  and  two  (2) 
cents  less  per  hundred  to  Philadelphia  than  the  agreed  rates  es- 
tablished from  time  to  time  to  New  York,  and  all  such  traffic 
shall  be  billed  at  the  rates  thus  fixed,  and  no  export  or  other 
drawback  shall  be  paid  thereon.  It  being  further  agreed,  that 
the  cost  to  the  shipper  of  delivering  grain  at  each  port  from  the 
terminus  of  each  of  the  roads  to  the  vessel  in  which  it  is  ex- 
ported, as  well  as  the  number  of  days  free  storage  allowed  there- 
on, shall  be  the  same. 

SECOND. — That  the  rates  to  Boston  shall  at  no  time  be  less 
than  those  to  New  York  on  domestic  or  foreign  freights. 

THIRD. — Should  rail  and  ocean  steam  through  bills  of  lading 
be  issued,  neither  of  the  parties  hereto  will  accept  as  its  propor- 
tion less  than  its  current  local  rates  to  its  seaboard  termini ;  but 


no  joint  rail  and  ocean  sail  bills  of  lading  shall  be  given  or 
recognized  by  the  parties  hereto. 

FOURTH. — That  on  all  Westbound  traffic  passing  over  the 
roads  of  the  parties  hereto  from  competitive  points  at  or  east  of 
their  respective  Eastern  termini  to  all  competitive  points  West, 
Forthv^^est  or  Southwest  of  their  Western  termini,  the  differences 
in  rates  from  Baltimore  and  Philadelphia  below  New  York  shall, 
on  third  class,  fourth  class,  and  special,  be  the  same  as  the  differ- 
ences fixed  on  Eastbound  business  and  on  first  and  second  classes, 
eight  (8)  cents  less  per  100  from  Baltimore,  and  six  (6)  cents 
less  per  100  from  Philadelphia  than  the  agreed  rates  from  New 
York.  And  that  after  existing  contracts  governing  foreign 
business  can  be  terminated,  neither  of  the  parties  hereto  will  ac- 
cept as  its  proportion  of  the  through  ocean,  steam  and  rail  rate 
less  than  the  established  local  rates. 

FIFTH. — All  agreements  inconsistent  herewith  are  hereby  an- 
nulled. 

IN  WITNESS  WHEREOF,  the  parties  hereto  have  affixed 
their  signatures  the  day  and  year  aforesaid,  to  this  agreement, 
which  is  intended  to  be  permanent;  but  if  either  party  desires 
modification,  three  months'  notice  must  be  given  of  such  desire. 
Said  modification  to  be  made  by  mutual  agreement. 

(Signed) 

N.  Y.  Central  &  Hudson  R.  R.  Co., 

by  Wm.  H.  Vanderbilt,  V.  P. 
The  Erie  Railway  Company, 

by  H.  J.  Jewett,  Receiver. 
The  Pennsylvania  Railroad  Co., 

by  Thomas  A.  Scott,  Pres't. 
The  Baltimore  &  Ohio  R.  R.  Co., 

by  John  W.  Garrett,  Pres't. 
True  copy  of  original. 

W.  H.  Ijams,  Sec'y. 


REPORT 

UPON     THE 

ADJUSTMENT   OF  RAILROAD  TRANSPORTATION  RATES 

TO     THE 

SEABOARD. 

BY 

Albert  Fink. 


CONTENTS. 

PACKS 

History  of  Past  Adjustment  of  Bates  to  the  Seaboard, S) 

Eesults  Obtained  Under  Past  Adjustments  and  Deductions  Therefrom.  \- 

CONDITIONS  that  CONTROL  DIVISION  OF  Tr,\FFIC  BETWEEN  COMPETING  LiNES 

AND  Cities,  When  Uninfluenced  by  Transportation  Rates,   M 

General  Principles   Involved  in  the  Adjustment  of  Transportation 

Rates,   --5 

Average  Inland  and  Ocean  Rates,  and  Comparative  Estimates  of  Cost 

OF  Transportation  to,  and  Through,  Seaboard  Cities,  27 

Ocean  Rates  Adjust  Themselves  to  Inland  Rates,  3:i 

General  Conclusions,  •^•' 


INDEX  TO  STATEMENTS. 


A  PAGE 

L  Grain  receipts  at,  and  exports  from  the  four  Atlantic  ports  during  the  years 

1878,   1879,   1880,    44 

2.  Eighth  class  tonnage  forwarded  to  the  four  Atlantic  cities  over  the  four 
Trunk  Lines  during  1880;    also  proportion  of  same  exported  on  through 

bills  of  lading, 45 

B 

1.  Westbound  tonnage  of  the  four  Atlantic  cities- during  the  years  1878,  1879, 

1880,  and  the  eight  months  ending  August  31,  1881  (including  the  Grand 
Trunk  Road  from   Boston),    45 

2.  Eastbound  tonnage  of  the  four  Atlantic  cities  during  the  year  1878,  and 

the  twelve  months  ending  July  31,  1880,  and  July  31,  1881,  respectively 
(exclusive  of  live  stock) ,   46 

3.  Export  tonnage  under  through  bills  of  lading  during  the  years  ending  July 

31,  1880,  and  July  31,  1881,  respectively,   46 

C 

1.  Receipts   (in  classes,  including  live  stock)   at  the  four  Atlantic  cities,  by 

the  Trunk  Lines,  during  the  year  1880,   47 

2.  Exports   (in  classes),  under  through  bills  of  lading,  at  the  four  Atlantic 

cities  during   1880,    47 

3.  Receipts  of  seventh  class  (provisions)  traffic  at  the  four  Atlantic  cities,  by 

the  four  Trunk  Lines,  during  the  year  1880,  48 

Total  exports  of  provisions  during  the  year  1880,   48 

4.  Imports  under  through  bills  of  lading  at  the  four  Atlantic  cities,  forwarded 

over  the  Trunk  Lines,  including  the  Grand  Trunk  Boad,  at  Boston, 48 

D 

1.  Receipts  of  flour  and  grain  at  New  York,  Philadelphia,  Baltimore,  Boston 

and  Montreal  during  1860,  and  1865  to  1880,  inclusive,   49 

2.  Exports  of  flour  and  grain  from  same  ports,  during  1873  to  1880,  inclusive,     49 

E 

Origin  of  Eastbound  traffic  during  1880,  destined  to  points  East  of  the  four 
Trunk  Lines'  Western  termini,    50 

F 

Destination  of  Westbound  traffic  from  Atlantic  cities,  and  interior  New 
England  competing  points,  during  1880,   52 

G 

1.  Average  quotations  of  ocean  rates  from  the  seaboard  cities  to  Liverpool,  by 

steamers,  and  Cork,  for  orders,  by  sailing  vessels,  during  the  years  1877, 
1878,  1879,  1880,   54 

2.  Differences  in  average  quotations  at   other  ports,  as  compared  with  New 

York, 55 

H 

1.  Quotations  of  rates  via  "lake  and  canal,"  and  "lake  and  rail,"  from  Chi- 

cago to  New  York,  during  1880,    56 

2.  Quotations   of   ocean   rates  at   New  York   and  Baltimore,   for   the   eleven 

months  ending  November  30,   1881,    56 

3.  Average  ocean  rates  on  export  grain  from  New  York  and  Baltimore,  during 

eleven  months  ending  November  30,  1881,   57 

J 

Destination  of  export  corn  and  wheat  from  New  York,  Philadelphia  and 
Baltimore,    58 

K 

Estimate   of   average  ocean  rates   on   grain,   exported  by   steam   and   sail, 

from  New  York,  Philadelphia  and  Baltimore,  during  1880,   60 

L 

Estimate  of  average  rate,  per  100  lbs.,  for  transporting  grain  to  and 
through  New  York,  Philadelphia  and  Baltimore  by  all  routes  durine 
1880, ^     62 

8 


KEPORT 

UPON     THE 

ADJUSTMENT   OF  RAILROAD   TRAxNSPORTATIOX   RATKS 

TO 

SEABOARD    CITIES. 


New  York,  Dee.  1,  1881. 

I  herewith  submit  a  report  upon  the  adjustment  of  transportation 
rates  over  the  Trunk  Lines  between  the  seaboard  cities  and  coiiihiom 
competing  points  in  the  West,  with  statistical  information  relating 
thereto.  The  question  is:  What  shall  be  the  relative  transport;itioM 
charges  by  rail  from  common  shipping  points  in  the  West  to  New  York 
and  the  other  Atlantic  seaboard  cities  ? 

During  the  last  twelve  years  changes  have  been  made  from  time  to 
time  in  the  adjustment  of  rates  which  it  will  be  interesting  to  note. 

In  1869  the  agreed  ditference  in  favor  of  Baltimore  in  the  rate  on 
grain  was  10  cents  per  100  pounds.  In  1870,  after  a  war  of  rates,  it 
was  reduced  to  5  cents  per  100  pounds.  Up  to  1876  this  difference 
remained  the  same  on  grain  and  the  lower  classes  of  freight,  while  there 
was  an  agreed  difference  of  10  cents  per  100  pounds  on  first,  second 
and  third-class  freight. 

On  Westbound  freight  the  difference  in  favor  of  Baltimore  ainl 
Philadelphia,  as  per  tariff  of  November,  1875,  was  as  shown  below: 


1st  Class. 

2d    Class. 

3d   Class. 

4th  Class. 

Baltimore 

Philadelphia 

10c. 
7c. 

9c. 
7c. 

8c. 
6e. 

6c. 
4e. 

Special 
Class. 


5e. 
3c. 


In  March,  1876,  the  sj'stem  of  making  fixed  differences  in  rates  basctl 
upon  New  York  rates  was  abandoned,  and  the  Trunk  Lines  agi-ced  to 
and  the  Western  roads  adopted,  on  April  13,  1876,  a  tariff  which  was 
based  upon  the  relative  distance  of  the  cities  named,  from  Western 
common  points.     According  to  this  tariff',  the  rates  from  Chicago  to 

9 


lU 


ATLANTIC    PORT    DIFFERENTIALS 


Baltimore  were  13  per  cent.,  and  to  Philadelphia  10  per  cent,  less  than 
to  New  York.  From  Cincinnati  to  Baltimore,  24  per  cent,  less,  and  to 
Philadelphia,  12  per  cent,  less  than  to  New  York. 

A  month  and  a  half  after  these  rates  were  adopted,  the  New  York 
Central  Railroad  and  Erie  Railway  withdrew  from  this  agreement,  as 
it  gave  too  great  advantage  to  Philadelphia  and  Baltimore.  A  war  of 
rates  coimnenced,  and  continued  until  July,  1877  ;  when  the  agreement 
of  April  5,  1877,  went  into  effect.  Fixed  differences  in  rates  were  re- 
established instead  of  the  differences  based  upon  relative  distance  from 
common  shipping  points. 

On  Eastbound  freight  the  rates  were  made  according  to  this  agree- 
ment, from  all  points  West  to  Baltimore,  3c.,  and  to  Philadelphia  2e., 
less  than  to  New  York.  On  Westbound  freight  the  rates  from  Balti- 
more and  Philadelphia  were  less  on  different  classes,  as  is  shown  below : 


1st  Class. 

2d   Class. 

3d    Class. 

4th  Class, 

From  Baltimore 

"     Philadelphia 

Be. 
6c. 

8c. 
6e. 

3c. 
2e. 

3c. 
2c. 

The  agreement  of  April  5,  1877,  was  made  with  the  view  of  equalizing 
the  aggregate  cost  of  rail  and  ocean  transportation  between  competing 
I)oints  in  the  West  and  all  domestic  and  foreign  ports  reached  through 
Baltimore,  Philadelphia  and  New  York. 

The  closing  article  of  this  agreement  reads :  ' '  This  agreement  is  in- 
tended to  be  permanent ;  but  if  either  party  desires  modification,  three 
months'  notice  must  be  given  of  such  desire,  said  modification  to  be 
made  by  mutual  agreement." 

The  agreement  is  signed  by  Messrs.  William  H.  Vanderbilt,  H.  J. 
Jewett,  Thomas  A.  Scott  and  John  W.  Garrett. 

The  New  York  Central  Railroad  Company  gave  the  required  no- 
tice, June  3,  1880,  on  the  ground  that  the  differences  in  rates  adopted 
April  5,  1877,  and  which  went  into  effect  July  1,  1877,  were  based  upon 
the  then  existuag  ocean  rates,  with  the  view  of  equalizing  shipments 
from  common  points  west  to  common  points  in  Europe,  making  at  that 
time  the  rates  substantially  the  same  on  all  export  business  through 
the  different  ports ;  but  that  since  that  time  reductions  have  been  made 
in  the  ocean  rates  from  Philadelphia  and  Baltimore,  which  bring  them 
nearly  on  the  same  level  with  those  from  New  York,  thus  giving  the 
Southern  ports  greatly  the  advantage  over  New  York  on  export  freight. 

No  official  discussion  with  the  view  of  modifying  "by  mutual  agree- 
ment" the  differences,  as  it  was  provided  in  the  contract  of  April  5, 


PINK:     ADJUSTMENT  OF  SEABOARD  RATES  11 

1877,  has  taken  place,  but  in  unofficial  intercourse  between  the  officers 
of  the  different  railroad  companies,  the  ground  is  generally  taken  by 
the  New  York  roads  that  the  inland  rates  to  lialtiinore  anil  Pliiladei- 
phia  should  be  the  same  as  to  New  York.  This  claim  is  not  admitted 
as  just  by  the  Pennsylvania  and  Baltimore  and  Ohio  Riiilroads. 

The  question  arises,  "What  is  a  proper  and  equitable  adjustment  (.1" 
rates,  taking  into  consideration  all  the  facts  bearing  upon  the  subject? 

Great  difficulties  and  complications  are  encountered  in  answering 
this  question. 

The  object  is  to  determine  the  relative  charges  for  transportation 
by  rail  to  the  seaboard  cities,  with  the  view  of  securing  to  each  of  tlie 
competing  railroad  companies  a  fair  share  of  the  traffic,  without  at  the 
same  time  unjustly  discriminating  between  the  commercial  comnunii- 
ties,  each  of  which  must  have  an  equal  chance,  unrestricted  by  arbi- 
trary transportation  charges,  to  compete  with  the  other  in  the  markets 
of  the  world. 

The  first  difficulty  met  in  solving  this  problem  is:  No  one  has, 
or  can  have,  any  definite  idea  as  to  what  constitutes  an  equitable  dis- 
tribution of  the  competitive  traffic  between  the  rival  railroads  and  be- 
tween the  rival  cities.  There  is  only  one  conviction  strong  in  the 
mind  of  each  of  the  interested  parties,  viz.,  that  it  should  have  all  that 
can  be  secured. 

In  the  second  place,  if  any  definite  idea  could  be  formed  as  to  what 
constitutes  a  jnst  and  equitable  distribution  of  traffic,  it  would  be  im- 
practicable and  impossible  to  predetermine  the  relative  transportation 
charges  that  would  result  in  the  desired  distribution. 

Thus  the  problem  to  be  solved  is  shrouded  in  uncertainties.  Re- 
sults are  to  be  reached,  which  no  one  is  able  to  define,  and  means  are 
to  be  used,  of  which  it  is  impossible  to  predetermine  their  exact  effect. 
Yet  it  is  absolutely  necessary  that  there  should  be  some  agreement  as 
to  the  relative  transportation  rates  to  and  from  the  competing  cities, 
as  a  failure  to  agree  upon  such  rates  must  naturally  result  in  ex- 
pensive and  costly  railroad  wars,  and  in  the  final  ruin  of  this  great 
railroad  property,  and  its  calamitous  consequences. 

A  war  of  rates  such  as  has  been  waged  for  the  last  four  or  five 
months  between  the  Trunk  Lines,  costs  the  railroad  companies  east  of 
the  Mississippi  River,  represented  on  the  Joint  Executive  Committee, 
at  the  rate  of  from  twenty-four  to  thirty  millions  of  dollars  per  annum. 

This  is  the  difference  between  just  and  reasonable  compensation,  to 
which  the-  railroad  companies  are  justly  entitled,  and  the  actual  com- 
pensation which  they  receive. 

These  wars  not  only  affect  the  interests  of  the  railroad  companies— 


12 


ATLANTIC    PORT    DIFFERENTIALS 


the  great  number  of  the  American  people,  who  have  invested  their 
means  in  this  property — but  they  also  affect  the  interests  of  others,  par- 
ticularly the  mercantile  classes  of  our  people.  These  fluctuations  and 
uncertain  rates  of  transportation  unsettle  commercial  trausactionjs, 
bring  about  unjust  discriminations,  and  many  of  the  other  evils  of 
which  the  people  complain,  and  for  which  railroad  companies  are  so 
often  blamed,  but  unjustly  so,  considering  the  complications  and  diffi- 
culties encountered  in  the  solution  of  the  problem. 

The  ciuestion  of  the  proper  adjustment  and  permanent  maintenance 
of  reasonable  and  just  transportation  rates  between  the  competing  rail- 
road companies,  must,  therefore,  be  considered  of  the  greatest  impor- 
tance not  only  to  the  railroad  companies,  but  it  is  really  a  question  of 
national  importance. 

I  make  these  remarks  to  justify  the  attempt  at  a  thorough  investiga- 
tion of  the  subject,  with  a  view  of  discovering,  if  possible,  whether 
there  are  not  some  certain  fixed  principles  thai  could  be  recognized  as 
correct  by  all  parties,  according  to  which  a  proper  adjustment  of  rates 
could  be  made  from  time  to  time  that  could  be  permanently  maintained, 
and  by  which  the  evils  that  must  follow  from  a  failure  to  agree  upon 
this  important  question,  could  be  prevented. 

It  will  be  necessary  to  first  consider  what  has  been  the  result  of  the 
adjustment  of  rates  as  at  present  agreed  upon,  and  in  what  respects 
they  are  not  satisfactory,  and  whether  there  are  good  reasons  why  a 
modification  should  be  made. 

THE   RESULTS   OBTAINED   UNDER    THE    OPERATION   OF    THE    AGREEMENT   OF 

APRIL    5,    1877. 


Statement  A  has  been  compiled  from  the  Produce  Exchange  Reports, 
showing  the  receipts  of  grain  and  flour  (converted  into  grain  at  4I/2 
bushels  per  barrel)  at  New  York,  Boston,  Philadelphia  and  Baltimore, 
during  the  existence  of  this  agreement. 

Expressed  in  percentages  of  the  total  receipts  of  grain  and  flour  at 
the  cities  above  named,  the  following  distribution  has  taken  place : 


1878. 

1879. 

1880. 

New  York 

56.0 
10.0 
16.7 
17.3 

52.6 
10.6 
15.. 3 
21.5 

53.5 
11.7 
15.6 
19.2 

Boston     

Philadelphia 

Baltimore   .....-, 

The  above  statement  includes  the  receipts  by  canal  and  other  routes 
besides  the  Trunk  Lines,  as  well  as  the  receipts  by  the  Trunk  Lines 


FINK:     ADJUSTMENT  OF   SEABOARD   RATES 


13 


from  local  points  on  their  roads  east  of  the  terminal  points,  whicli  hitter 
cannot  be  considered  as  competitive  traffic  between  the  Trunk  Lines. 

Statement  B  shows  the  receipts  of  Eastbound  tonnage  of  all  classes 
by  rail  over  the  four  Trunk  Lines  to  Boston  (including  x\e\v  England ), 
New  York,  Philadelphia  and  Baltimore  (exclusive  of  the  tratlic  carried 
to  Boston  via  the  Grand  Trunk  Eailway).  This  traffic  originates  at, 
and  west  of,  the  termini  of  the  Trunk  Lines  (Buffalo,  Pittsl)urgh, 
Salamanca,  Wheeling,  Parkersburgh,  etc.),  and  may  be  considered  as 
competitive  traffic. 

The  result  expressed  in  percentages  of  total  tonnage  carried  by  the 
four  Trunk  Lines  is  as  follows : 


1878. 

1879. 

1880. 

New  York 

Boston  (including  New  England)    

Philadelphia 

42.8 
22.0 
17.6 
17.6 

43.2 
19.5 
18.4 
18.9 

44.3 
23.3 
16.1 

Baltimore    

16.3 

The  same  statement  also  shows  the  Westbound  traffic  from  the  four 
cities  named,  including  that  carried  by  the  Grand  Trunk  from  Boston, 
and  from  a  number  of  competitive  points  in  New  England.* 


1878. 


1879. 


1880. 


1881. 
(8  months.) 


New  York  . 
Boston  .... 
Philadelphia 
Baltimore  .  . 


58.1 
16.2 
15.5 
10.2 


.54.2 
16.3 
16.1 
13.4 


54 

6 

16 

5 

16 

0 

12 

9 

56.3 
18.9 
13.6 
11.2 


In  examining  these  statements,  one  must  be  struck  with  the  small 
fluctuations  in  the  distribution  of  Eastbound  and  Westbound  traffic 
that  have  taken  place  since  the  agreement  of  April  5,  1877;  and  tiie 
conclusion  might  be  drawn  from  the  facts  presented,  that  the  adjust- 
ment of  rates  then  agreed  upon  should  be  satisfactory,  as  the  relative 
proportion  of  the  whole  competitive  traffic  carried  to  and  from  each 
of  the  rival  cities  has  remained  about  the  same,  or  as  nearly  so  as  couhl 
be  reasonably  expected.  The  great  increase  in  traffic  has  been  shared 
proportionately  by  each  of  the  several  cities.     Neither  city  would,  there- 


*The  tonnage  carried  by  outside  lines  from  New  \ork,  which  ';  ^  ^  'V^^  ! 
competition  since  1878,  and  which  is  not  included  ,n  the  «'^"^'^;;*=•^,  ^''  J /^  f  ^^^^^ 
accounts  for  the  reduction  in  the  percentage  carried  by  the  four  Iru.ik  Koad.  tro.u 
New  York. 


14  ATLANTIC   PORT   DIFFERENTIALS 

fore,  seem  to  have  a  right  to  complain,  nor  the  Kailroad  Companies, 
whose  interests  are  identified  with  these  cities. 

It  is,  however,  maintained  by  the  New  York  Central  Railroad  Com- 
pany, that  the  facts  here  presented  are  not  conclusive.  It  is  admitted, 
that  on  account  of  what  was  considered  an  unfair  adjustment  of  rates, 
certain  concessions  have  been  made  to  shippers  to  New  York,  by  which 
the  differences  in  rates  in  favor  of  Philadelphia  and  Baltimore  were, 
in  a  measure,  counteracted.  The  New  York  Central  Railroad  Cora- 
panj^  maintains  that  if  the  present  agreed  differentials  had  been  strictly 
adhered  to,  business  that  legitimately  belongs  to  New  York  would  have 
been  diverted  to  the  Southern  ports. 

This,  of  course,  raises  a  new  question,  viz. :  "What  has  been  the  actual 
relative  adjustment  of  rates  for  the  period  during  which  the  distribu- 
tion of  traffic  took  place,  as  reported  in  the  foregoing  statements  ? 

If  this  were  known,  some  opinion  could  be  formed  as  to  the  future 
adjustment.  It  is  not  maintained  that  any  of  the  Trunk  Lines  or  their 
connections  have  very  strictly  adhered  to  the  established  and  published 
tariff.  It  is  very  probable  that  concessions  made  by  the  New  York 
roads  have  been  promptly,  although  not  openly,  met  by  the  other  rail- 
roads, and  vice  versa. 

It  might  be  possible,  but  it  would  be  very  difficult,  to  ascertain  the 
actual  rates  that  were  charged  to  each  of  the  cities  by  each  of  the  roads 
during  the  periods  named.  Could  this  information  be  obtained,  it 
might  form  a  correct  basis  for  a  new  adjustment  of  differences  in  rates, 
provided  it  is  conceded  that  the  distribution  of  traffic  during  the  last 
three  years  has  been  satisfactory. 

But  in  the  absence  of  the  knowledge  of  the  actual  rates  that  have 
lieen  charged  under  which  these  results  were  reached,  we  have  only  to 
deal  wath  the  simple  fact,  that  during  the  last  three  years,  under  an 
adjustment  of  rates  that  is  unknow^n,  there  has  been  no  material  change 
in  the  relative  distribution  of  the  traffic  between  the  four  cities.  Dur- 
ing a  portion  of  the  time,  in  1878-79,  hardly  any  serious  attempt  was 
made  to  maintain  rates.  During  a  period  in  1879  a  war  of  rates  was 
carried  on;  but,  commencing  with  July,  1879,  and  during  the  year 
1880,  rates  Avere  more  strictly  maintained  than  at  any  previous  time  in 
the  historj^  of  the  Trunk  Line  competition  ;  but  even  during  that  period 
the  railroads  made  rates  from  time  to  time  to  suit  their  own  interests, 
regardless  of  the  agreed  adjustments. 

We  must,  therefore,  conclude  that  the  results  as  presented  in  State- 
ments A  and  B,  were  obtained  under  free  competition,  restricted  dur- 
ing some  portions  of  the  time  within  narrower  limits  than  under  an 
open  war  of  rates.     While,  therefore,  these  statistics  have  no  value  in 


FINK:     ADJUSTMENT   OF   SEABOARD   RATES  If) 

determining  the  operations  of  differential  rates  in  the  past,  or  i'oi-  the 
purpose  of  basing  upon  them  a  new  adjustment,  they  possess  great 
value  as  showing  the  distribution  of  traffic  under  th(>  operation  of  free 
competition,  uninfluenced  by  any  fixed  adjustment  of  transportation 
rates. 

Another  very  important  conclusion  must  l)e  drawn  Ironi  the  facts 
presented,  viz.:  That  the  constancy  with  which  this  disti-ihntion  has 
taken  place  under  the  free  competition  of  the  transportation  lines,  must 
be  ascribed  to  the  existence  of  certain  laws  and  conditions  that  deter- 
mine the  distribution  of  traffic  under  free  competition,  as  such  con- 
stancy in  results  could  hardly  be  expected  from  mere  accidental  causes. 

It,  therefore,  becomes  of  great  interest  to  determine,  if  possible,  what 
are  these  conditions  that  influence  and  control  the  distribution  of  traffic 
between  the  rival  Railroad  Companies  and  rival  commercial  comnnnii- 
1  ies  ?     Upon  this  point  I  wish  to  present  the  following  views : 

THE  PRIMARY  CONDITIONS  THAT  CONTROL  AND  LIMIT  THE  DISTRIIU'TION'  OF 
TRAFFIC  UNINFLUENCED  BY  TRANSPORTATION  RATES. 

First. — One  of  these  conditions  is:  The  relative  carrying  capacity 
of  the  Railroads  and  Transportation  Lines,  and  the  extent  of  theii- 
Terminal  Facilities. 

The  carrying  capacity  of  the  Trunk  Lines  is,  during  a  portion  of  tli" 
year,  taxed  to  its  full  extent ;  at  least  this  has  been  the  case  in  the  last 
two  years,  during  which  statistics  have  been  kept  in  this  office,  showing 
the  tonnage  carried  by  the  Trunk  Lines  while  they  were  taxed  to  their 
fullest  capacity.  If  any  one  of  the  Trunk  Lines  had  carried  freight 
for  nothing  during  that  period,  it  could  not  have  increased  its  tonnage 
at  the  expense  of  its  competitors. 

The  question  of  the  adjustment  of  rates,  under  these  circumstances, 
has,  therefore,  no  practical  bearing  upon  the  distribution  of  traffic  be- 
tween the  Trunk  Lines;  and  as  this  distribution  alfects,  in  a  measure, 
the  distribution  between  the  cities,  it  has  no  bearing  upon  tlie  latter. 

The  statistics  of  the  relative  amount  of  traffic  carried  by  eaeii  Tnnik 
Line,  show  the  important  fact,  that  the  relative  amount  of  business 
transacted  during  the  period  when  the  Trunk  Lines  were  taxed  to  then- 
fullest  extent,  and  when  the  adjustment  of  rates  could  have  no  inllii- 
ence,  did  not  materially  differ  from  the  relative  amounts  of  tonnage 
carried  during  the  whole  year ;  which  shows  that  there  are  certaui  laws 
and  conditions  M^hich  regulate  the  distribution  of  traffic  even  at  times 
when  there  is  not  as  much  business  as  the  railroads  can  ean-y. 

This  is  further  proven  by  statistics,  showing  that  fnmi  .linic  1').  to 
November  1,  1881,  during  the  present  war  of  rates,  when  <':ich  road 


16  ATLANTIC   PORT   DIFFERENTIALS 

made  such  rates  as  it  saw  fit,  the  distribution  of  the  competitive  traffic- 
between  the  Trunk  Lines  has  not  materially  changed,  as  compared  Mdth 
the  preceding  twelve  months,  ending  June  1, 1881,  during  which  period 
there  was  a  nearer  approach  to  a  maintenance  of  rates  than  at  any 
previous  time. 

It  appears  from  these  statistics,  that  the  variations  in  percentages 
of  total  tonnage  carried  by  the  four  Trunk  Lines  during  the  war  of 
rates,  as  compared  with  the  previous  year,  when  the  railroads  received 
reasonable  compensation  for  their  services,  were  as  follows : 

The  N.  Y.  C.  &  H.  R.  R.  R.  gained— 1 . 1  per  cent. 
The  N.  Y.,  L.  E.  &  W.  R.  R.  gained— 1.1  per  cent. 

The  Penns.ylvania  R.  R gained — 0.5  per  cent. 

The  Bait.  &  Ohio  R.  R lost— 2.7  per  cent. 

The  reduction  in  the  percentage  of  the  Baltimore  &  Ohio  Railroad 
was,  no  doubt,  due  to  the  failure  of  the  grain  crop  in  the  territory 
which  is  especially  tributary  to  that  road.  It  may  also  be  partially 
due  to  the  policy  of  the  Baltimore  &  Ohio,  during  a  war  of  rates,  not 
to  carry  freight  at  a  loss. 

These  statements,  it  may  be  remarked  here,  prove  how  unprofitable 
are  wars  of  rates.  They  do  not  change  the  distribution  of  traffic  be- 
tween the  competing  lines  or  even  between  competing  cities ;  their  only 
effect  is  a  general  reduction  in  the  revenue  of  the  roads  engaged  in 
them. 

To  prove  more  conclusively  that  the  relative  carrying  capacity  of 
the  Trunk  Lines,  and  their  terminal  facilities,  primarily  control  the 
relative  amount  of  traffic  received  by  each  city,  Statement  D  has  been 
prepared,  showing  the  grain  receipts  at  the  five  Atlantic  seaboard 
cities  during  the  last  fifteen  years,  from  1865  to  1880,  inclusive;  also 
including  the  year  1860. 

Immediately  after  the  war,  in  1865,  the  Baltimore  &  Ohio  Railroad 
commenced  to  enter  into  competition  for  the  grain  carrying  business, 
by  establishing  lines  of  steamers  from  Baltimore  and  by  extending 
their  railroad  system  and  connections  in  the  West,  through  leases,  and 
by  constructing  new  roads.  Its  main  line  was  extended  to  Chicago  in 
1874. 

Meanwhile,  the  Pennsylvania  Railroad  Company  had  also  extended 
its  railroad  system  in  the  West,  and  controlled  or  owned  most  of  its 
Western  connections.  It  had  acquired  the  Northern  Central  Railroad, 
and  had  improved  its  terminal  facilities  in  Baltimore  and  Philadelphia. 
We  notice,  on  Statement  D,  consequently,  constant  increase  in  the  re- 
ceipts of  grain  at  Philadelphia  and  Baltimore.  The  receipts  at  Phila- 
delphia increased  from  8.6  per  cent,  in  1865,  to  12.3  per  cent,  in  1870. 


FINK:     ADJUSTMENT   OP    SEABOARD    RATES  17 

and  to  17.4  per  cent,  in  1876.     The  Baltimore  receipts  increased  fr 

11.4  per  cent,  in  1865,  to  16.9  per  cent,  in  1876. 

It  was  during  the  war  of  rates  in  1876  that  the  re('eii)ts  at  lialtiiimn. 
increased  4.7  per  cent,  over  the  previous  year,  showiiii;  tlie  elTcct  of  the 
improvements  made  in  transportation  and  terminal  facilities,  durinj?  a 
year  of  free  competition  between  the  transportation  lines,  uninfluenced 
by  any  arbitrary  adjustment  of  rates. 

In  the  meantime  New  York  had  not  been  idle.  Improvements  in  its 
terminal  facilities  were  commenced,  and  increased  efforts  were  made 
to  maintain  its  grain  trade ;  and  we  find  from  Statements  A,  li  and  D, 
that  since  1877,  during  which  period  the  terminal  and  transportation 
facilities  have  remained  relatively  about  the  same  in  the  various  cities, 
the  distribution  of  the  traffic  between  those  cities  has  not  materially 
changed. 

Another  illustration  of  the  correctness  of  the  above  assertions  as  to 
the  controlling  power  of  terminal  facilities,  is  furnished  by  tlu'  ex- 
perience of  1881.  During  the  last  year,  great  additions  have  been 
made  to  the  terminal  facilities  at  New  York,  by  the  erection  of  elevators 
for  the  New  York,  Lake  Erie  and  AYestern  and  Pennsylvania  Railroads. 
while  the  terminal  facilities  of  the  Southern  ports  have  remained  sta- 
tionary. We  already  see  the  practical  effect  during  1881  in  the  grain 
receipts  in  the  City  of  New  York.  While  the  canal  has  not  brought 
much  more  than  one-half  the  proportion  of  grain  to  New  York  which 
it  carried  last  y-ear,  the  increased  rail  receipts  have  made  np  the  de- 
ficiency, so  that  the  relative  amount  of  grain  received  at  New  Yoi-k 
during  this  j^ear  is  about  the  same  as  last  year.  Without  these  in- 
creased terminal  facilities,  New  York  would,  no  doubt,  have  received 
less  grain,  because  the  competition  between  the  railroads  lias  rrdnccl 
to  such  a  great  extent  the  receipts  by  canal.  This  was  the  case  during 
the  war  of  rates  in  1876,  when  the  relative  grain  receipts  in  New  York 
were  less  than  in  any  year  since  1865. 

From  these  facts,  showing  the  controlling  influence  of  tlu'  rehttiv" 
carrying  capacity  of  the  railroads  and  of  the  terminal  facilities  ui)om 
the  distribution  of  traffic,  the  conclusion  must  be  drawn,  that  any  arbi- 
trary adjustment  of  rates  which  might  be  agreed  upon,  could  not  be 
maintained  for  any  length  of  time,  if  it  would  have  tb.^  cfT.-ct  of  coun- 
teracting these  more  powerful  controlling  agencies. 

The  past  history  of  competition  between  the  Trunk  Lines  fully 
establishes  the  fact,  that  arbitrary  differentials  have  been  maintained 
only  so  long  as  it  suited  the  interests  of  the  competing  roads.  The  dis- 
tribution  of  the  grain  traffic  during  the  last  fifteen  years  between  tlic 
five  cities,  as  recorded  in  Statement  D,  must  be  considered  as  the  result 
2 


18  ATLANTIC    PORT   DIFFERENTIALS 

of  free  competition  between  the  railroad  companies,  and  the  result  of 
their  efforts  to  improve  their  transportation  and  terminal  facilities, 
nnintliienced  by  any  arbitrary  adjustment  of  rates. 

It  is  important  to  keep  this  fact  in  view,  as  it  will  aid  in  answering 
the  question,  "What  constitutes  just  and  equitable  adjustment  of  trans- 
portation rates  ? ' '  viz. :  That  adjustment  is  the  proper  one  which  does 
not  interfere  with  the  natural  distribution  of  traffic  as  influenced  by 
the  transportation  facilities  of  the  competing  roads.  The  railroad 
companies  and  the  commercial  communities  must  rely  upon  their  own 
efforts  to  improve  the  conditions  that  legitimately  influence  the  distri- 
bution of  traffic,  rather  than  upon  the  efforts  of  competing  roads  to 
maintain  an  arbitrary  adjustment  of  rates,  or  to  undercut  rates  one 
against  the  other. 

As  a  second  condition  which  influences  the  distribution  of  the  grain 
traffic  (constituting  about  73  per  cent,  of  the  total  Trunk  Line  East- 
bound  tonnage  to  the  seaboard  cities),  may  be  mentioned  the  storage 
capacity  of  private  warehouses  in  the  various  cities,  which  limit  the 
business  transactions,  regardless  of  transportation  rates,  in  the  same 
way  as  the  carrying  capacity  and  terminal  facilities  of  the  railroads. 

The  great  influence  which  this  storage  capacity  exercises  over  the 
distribution  of  traffic,  is  illustrated  by  the  experience  of  Baltimore 
during  last  summer.  Baltimore,  having  only  a  storage  capacity  of  one- 
fifth  of  that  of  New  York,  could  not,  under  the  then  existing  circum- 
stances, have  received  more  than  a  certain  amount  of  grain,  even  if  it 
had  been  carried  to  that  city  for  nothing.  The  limiting  influence  of 
the  storage  capacity  is  mostly  felt  during  times  when  there  is  no,  or  a 
small  demand  for  export  grain.  After  the  storage  capacity  is  ex- 
hausted, the  railroads  can  only  carry  sufficient  grain  to  supply  the 
demand  from  day  to  day.  Emergencies  of  this  kind  frequently  occur, 
and  form  a  strong  element  in  influencing  the  final  results  of  the  distri- 
bution of  traffic  between  the  seaboard  cities,  regardless  of  adjustment 
of  transportation  rates. 

The  effect  of  temporary  restrictions  of  the  trade  of  a  city,  extends 
far  beyond  the  time  during  which  they  exist.  Frequent  blockades, 
caused  by  want  of  storage  capacity,  are  a  permanent  injury,  and  can 
only  be  avoided  by  large  additional  outlay  of  capital.* 


*The  correctness  of  these  views,  and  the  effect  of  limited  storage  capacity  in 
restricting  the  distribution  of  traffic  between  the  rival  cities,  is  shown  by  the  fol- 
lowing extract  from  a  letter,  published  in  the  American  Exchange,  January  3,  1882. 
The  letter  was  written  by  a  New  York  grain  merchant,  who  also  does  business  in 
Baltimore,  in  answer  to  an  inquiry  whether  a  certain  difference  in  rates  in  favor 
of  Baltimore  would  overcome  the  advantages  which  New  York  possessed.  It  says: 
"Yes,  we  believe  that  if  Baltimore  will  simply  increase  her  storage  facilities,  and 
give  reasonable  guarantees  that  she  will  hereafter  refrain  from  the  suicidal  policy 


FINK:     ADJUSTMENT  OP   SEABOARD   RATES  19 

Third.— Other  conditions  tliat  inHiionce  the  distribution  of  traflfie 
are,  the  established  commercial  relations  of  each  city  in  tliis  and  foreif^n 
countries,  the  capital  employed,  the  enterprise  of  its  iiuTchants.  tii.- 
shipping  facilities,  especially  as  influenced  by  the  import  trade,  and 
even  by  the  current  passenger  and  emigrant  business— all  tiicsc  .-Ic- 
ments  exercise  the  strongest  influence  in  determining  the  curri'iit  of 
trade. 

The  advantage  which  one  city  may  possess  in  this  respect  cannot  in- 
readily  counteracted  by  others  less  favorably  situated;  at  least,  any 
change  in  these  conditions  that  influence  the  amount  of  business  trans- 
acted, must  necessarily  be  of  but  slow  growth.  The  older  and  estab- 
lished markets  should  and  generally  do  keep  up  with  the  improvements 
made  by  their  younger  competitors,  and  it  is,  therefore,  rea.sonable  to 
expect  that  their  relations  in  this  respect  will  remain  pernuuient.  Hut 
if  changed,  the  change  is  certainly  a  legitimate  one,  and  should  not  )>>■ 
counteracted  by  any  arbitrary  adjustment  of  transportation  rates. 

Fourth. — One  of  the  most  important  controlling  conditions  affecting 
the  distribution  of  trafSc  between  the  Trunk  Lines,  and,  in  a  measure 
therefore,  between  the  Atlantic  seaboard  cities,  is,  the  location  of  tli" 
competing  railroads,  and  of  their  connections  relative  to  the  territory 
from  which  they  draw  their  business. 

There  seems  to  be  a  general  impression  that  the  bulk  of  the  traflRe 
of  the  Trunk  Lines  is  drawn  from  the  principal  points  of  competition 
where  the  products  of  the  country  are  collected,  such  as  Chieago.  St. 
Louis,  Cincinnati,  etc.  That  this  is  not  the  fact,  will  appear  from 
Statement  E,  which  shows  the  sources  from  which  the  traffic  that 
passes  over  the  four  Trunk  Lines  is  derived;  it  also  shows  the  relative 
amount  of  traffic  obtained  from  each  of  these  sources. 

From  this  statement  it  appears  that  the  principal  jwiuts  of  competi- 
tion, Chicago,  Peoria,  St.  Louis,  Indianapolis,  Cinciniuiti.  and  Louis- 
ville, furnish  only  26.25  per  cent,  of  the  whole  amount  of  traffic  carried 
by  the  four  Trunk  Lines.  The  traffic  from  these  cities  has  heretofore 
been  apportioned  between  the  terminal  roads,  and  the  question  of  the 
adjustment  of  rates  is,  therefore,  of  little  importance,  as  far  as  the 
railroads  are  concerned,  if  the  agreement  in  regard  to  division  of  traffic 
is  perfected  and  carried  out. 

Four  other  important  points,  IMilwaukee,  Cleveland,  Detroit  and 
Toledo,  furnish  9.76  per  cent,  of  the  total  traffic.     At  Toledo  the  \\.\ 
bash,  St.  Louis  and  Pacific  Railway  traffic  is  already  divided.     .\t 

of  exorbitant  storagre  charges" ,     '•       ■  i'  v'      v    u  •  • 

"She  conld  live  and  hold  her  own  even  upon  an  eonal  freie-ht  basis  with  .N.-w  ^  ork. 

This  means,  if  Baltimore  had  the  same  facilities  of  transactinn  business  as  New 
York  (the  increased  storage  charges  being  the  result  of  want  of  stnraT  .apacit)  ). 
Baltimore  could  hold  her  own  at  even  transportation  charges. 


20  ATLANTIC    PORT   DIFFERENTIALS 

Detroit  a  division  has  been  contemplated,  and  if  the  agreement  is  per- 
fected, the  question  of  an  exact  adjustment  of  rates  will  be  eliminated 
from  this  portion  of  the  competitive  traffic. 

From  fifteen  other  less  important  points  (enumerated  in  Sec.  Ill  of 
Statement  E),  where  there  is  comparatively  a  small  amount  of  business, 
and  the  competition  is  confined  to  fewer  roads,  only  6.99  per  cent,  of  the 
A\hole  Trunk  Line  Traffic  is  derived.  It  would  not  be  difficult  to  also 
agree  on  a  division  of  traffic  from  these  sources. 

The  terminal  points  of  the  Trunk  Lines  furnish  13.64  per  cent.,  to 
which  Buffalo  alone,  where  there  are  practically  only  two  competing 
lines,  contributes  9.83  per  cent. 

Outside  of  the  competitive  points  enumerated  in  this  statement, 
43.36  per  cent,  of  the  total  traffic  is  derived  from  places  not  enumerated 
in  the  first  four  sections  of  the  statement,  and  which  are  classified  ac- 
cording to  States  in  Sec.  V.  The  bulk  of  this  traffic  must  be  looked 
upon  in  the  nature  of  local  traffic,  as  it  is  gathered  up  by  the  railroads 
along  their  lines,  and  for  which  there  is  practically  little  or  no  com- 
petition. The  distribution  of  this  traffic  between  the  Trunk  Lines  i^ 
practically  determined  by  the  location  of  the  connections  of  the  Trunk 
Lines,  regardless  of  the  adjustment  of  rates,  as  this  business  is,  or  can 
be,  controlled  locally  by  the  roads  to  which  it  is  directly  tributary. 

For  example,  the  traffic  of  the  Pennsylvania  Railroad,  with  its  sys- 
tem of  connecting  roads,  owned  and  controlled  by  it,  comes,  one-half 
from  other  sources  than  the  points  of  competition  named  in  the  three 
first  sections  of  Statement  E.  It  comes  from  local  points  along  its 
lines.  Only  one-fourth  comes  from  the  principal  competitive  j)Oints 
named  in  Sec.  I.,  and  the  other  fourth  from  the  smaller  competing 
points  as  well  as  from  the  terminal  points.  This  readily  accounts  for 
the  constancy  in  the  relative  proportion  of  the  business  received 
by  the  Pennsylvania  Railroad,  as  well  as  by  the  other  roads,  re- 
gardless of  rates,  whether  there  is  a  war  of  rates  or  an  agreement 
to  maintain  rates.  The  same  feature  as  controlling  the  distribu- 
tion of  traffic  is  also  strongly  marked  in  the  Baltimore  and  Ohio 
Railroad.  Fifty  per  cent,  of  its  business  is  derived  from  the  States 
of  Illinois,  Indiana,  and  Ohio,  outside  of  the  competitive  points  spe- 
cially enumerated  in  the  statement.  Only  twenty  per  cent,  is  derived 
from  the  principal  competitive  points;  about  five  per  cent,  from  the 
States  west  of  the  Mississippi  River,  and  the  rest  is  gathered  up  from 
the  smaller  points  of  competition  and  terminal  points.  Ninety  per 
cent,  of  its  total  business  is  derived  from  points  east  of  the  IMississippi 
River  and  south  of  Chicago,  including  Chicago,  showing  how  the  loca- 
tion of  the  road  influences  the  traffic  it  receives. 


FINK:     ADJUSTMENT   OF    SEABOARD   RATES  21 

Although  the  Baltimore  and  Ohio  Railroad  has  the  same  connections 
as  all  the  other  Trunk  Lines  with  the  Northwest,  its  capacity  seems 
ti\]\y  taxed  by  the  business  from  the  territory  which  it  immediately 
serves. 

I  have  given  as  a  probable  cause  of  the  reduction  of  the  percentage 
of  the  business  received  by  the  Baltimore  and  Ohio  Railroad  during  tlic 
present  war  of  rates,  the  fact  that  the  grain  crop  was  a  failiicc  in 
Southern  Illinois,  Indiana  and  Ohio,  It  will  now  be  ch'ar  how  iiiiirl' 
such  a  local  failure  of  crops  must  aft'ect  the  traffic  of  that  rojid.  In 
other  years,  when  there  is  a  large  crop  in  that  section  of  the  country, 
and  a  failure  in  the  Northwestern  States,  the  Baltimore  and  Ohio  Rail- 
road would  get  relatively  larger  proportion  of  grain  ;  and  tiierefore  no 
argument  should  be  based  upon  the  actual  amount  of  tonnage  carried 
by  each  road  as  to  the  operation  of  any  particular  adjustment  of  rates, 
without  taking  into  consideration  the  sources  of  tiie  traffic  and  the  con- 
ditions under  which  it  is  obtained  by  each  road.* 

The  fifth  and  last  condition  which  I  will  mention  that  influences  the 
distribution  of  traffic  between  the  Trunk  Lines  is,  the  result  of  the 
practice  of  each  competing  railroad  attaching  to  itself  in  the  course  ol 
time  a  certain  number  of  shippers,  and  retaining  the  same.  These 
shippers  become  accustomed  to  the  road,  and  prefer  it  to  othci's  npon 
equal  terms.  During  a  contest,  or  war  of  rates,  each  of  the  competing 
roads  assures  its  regular  patrons  that  it  will  do  as  well  by  them  as  any 
other  road,  and  thus  their  business  is  retained.  It  is  only  in  this  way 
that  the  constancy  in  the  relative  amount  of  business  carried  by  a  nnm- 
ber  of  roads  from  competing  points,  whether  rates  are  maintained  or 
not,  can  be  fully  explained. 

Take,  for  example,  Chicago.  In  June,  1879,  it  was  agreed  that  the 
Eastbound  traffic  from  Chicago  should  be  divided  between  the  terminal 


^Although  not  directly  bearing  upon  the  question  under  consideration,  I  will 
here  call  attention  to  the  interesting  fact  exhibited  in  Statement  E,  bearing  upon 
the  Trunk  Line  competition  with  the  Mississippi  River  route. 

It  will  be  seen  from  this  statement,  that  83.81  per  cent,  of  the  total  Trunk  Lnu- 
traffic  is  derived  from  points  east  of  the  Mississippi  River  and  south  of  Clncago, 
including  Qiicago.  From  Wisconsin  only  5.72  per  cent,  is  received;  from  Iowa, 
4.79;  from  Missouri,  5.20;  from  Arkansas  and  Texas,  etc.,  ().4S  i)er  cent.  This 
traffic,  combined,  amounts  to  1G.19  per  cent,  of  the  total  Trunk  Line  trajhc. 

The  traffic  that  is  taken  from  Chicago  and  Milwaukee,  anuninting  to  1/  per  cent, 
of  the  whole,  comes,  no  doubt,  from  the  Northwestern  States,  but  is  gathered  up 
by  the  roads  whose  interests  are  centred  at  Chicago,  and  can  hardly  be  diverteM 
to  the  Mississippi  River  route.  The  16.19  per  cent,  from  States  west  ot  nncago 
and  the  Mississippi  River,  which  is  sent  direct  to  the  seaboard,  is  also  brought  to 
Chicago  and  St.  Louis  bv  roads  whose  interests  are  adverse  to  the  Mississipi-i  lUwr 
route,  and  which  will  seek  to  retain  this  traffic  in  competition  with  that  route 

Attention  is  also  called  to  Statement  F,  showing  the  distribution  of  Westboumi 
traffic  from  seaboard  cities.     Although  it  has  no  bearing  upon  tiie  subject  ol   n«e 

adjustment  of  terminal  rates,  a  comparison  with  Statement  L  may  I t  •^"""'  '" 

terest. 


22  ATLANTIC    PORT   DIFFERENTIALS 

roads  centering  at  that  point,  in  certain  proportions.  The  statistics 
for  the  four  preceding  years  were  produced,  and  they  revealed  the  fact 
that  each  road  had  carried,  during  that  time,  and  under  free  competi- 
tion, about  the  same  proportion  each  year.  The  new  agreement  was 
based  upon  past  experience,  with  some  modifications,  which  were 
deemed  just,  as  decided  by  the  Board  of  Arbitration;  and  it  is  now 
found,  after  two  years,  that,  during  that  time,  without  any  artificial 
effort  having  been  made  to  change  the  traffic  from  one  road  to  another, 
each  of  the  roads  has  carried  about  the  proportion  of  traffic  that  was 
assigned  to  it.  During  the  two  j-ears,  4,700,000  tons  were  carried  from 
Chicago,  and  only  56,000  tons,  or  ]  .2  per  cent.,  would  have  had  to  be 
transferred  between  the  roads  in  order  to  carry  out  the  agreed  division. 
Rates  were  not  strictly  maintained  during  this  time,  but  the  distribu- 
tion of  traffic  being  satisfactory,  the  question  of  any  nice  adjustment 
of  rates  loses  its  importance. 

The  proper  plan,  as  suggested  by  these  facts  which  I  have  presented 
in  the  foregoing,  is :  To  distribute  the  traffic  at  its  source,  and  then  let 
it  take  its  natural  course  to  the  seaboard.  It  is  much  easier  to  deter- 
mine the  relative  amount  of  business  that  should  be  carried  by  each  of 
the  Trunk  Lines,  from  the  points  at  which  the  traffic  originates,  than 
to  determine  what  shall  be  the  amount  of  traffic  to  be  delivered  at  each 
of  the  seaboard  cities.  The  latter  operation  could  be  compared  with 
an  effort  to  determine  the  amount  of  water  that  a  river  shall  discharge 
into  the  ocean,  without  regard  to  its  source  and  the  extent  of  territory 
it  drains.  The  great  Trunk  Lines  are  nothing  but  great  arteries  of 
commerce  like  rivers;  only,  with  this  difference,  the  rivers  never  run 
across  each  other,  the  territory  from  which  they  draw  their  supplies  is 
distinct  and  well  defined.  Where  railroads  cross  each  other  or  a  num- 
ber terminate  at  the  same  point,  it  is  only  necessary  that  special  agree- 
ments should  be  made  at  these  points  as  to  the  relative  amount  of  traffic 
to  be  carried  by  each  competing  road,  and  then  the  territory'  that  each 
railroad  company  is  to  serve  would  be  practically  defined.  It  is  much 
easier  to  make  these  divisions  at  the  point  of  origin  of  the  traffic  than 
to  pre-determine,  without  regard  to  the  source  and  origin,  the  amount 
of  traffic  to  be  delivered  at  the  termini  of  the  Trunk  Lines,  or  to  at- 
tempt by  the  establishment  of  arbitrary  transportation  rates  to  dis- 
tribute the  traffic  between  the  competing  roads  or  competing  cities. 
In  fact,  the  latter  is  utterly  impossible,  and  all  attempts  that  are  made 
in  that  direction  must  fail. 

The  expensive  contest  that  is  now  being  waged  over  the  question  of 
a  nice  adjustment  of  rates,  by  which  is  to  be  determined  the  distribu- 
tion of  the  traffic  between  the  seaboard  cities,  is,  therefore,  more  of  a 


FINK:     ADJUSTMENT   OP   SEABOARD   RATES  23 

theoretical  than  a  practical  nature.  No  agreement  that  runs  coiiiit.'r 
to  the  natural  distribution  under  the  conditions  wliich  I  have  coiii- 
mented  upon,  can  ever  be  carried  out.  The  contest  for  the  competitive 
traffic  should  be  settled  at  its  source,  and  the  traffic  should  then  be  al- 
lowed to  flow  to  the  seaboard,  uninfluenced  by  arbitrary  rates. 

All  these  considerations  may,  at  first  sight,  seem  irrelevant  to  the 
subject  of  determining  the  adjustment  of  transportation  rates  over  the 
Trunk  Lines  to  the  seaboard  cities;  but  they  have  a  very  important 
bearing  upon  the  question  :  AVhat  is  a  proper  distribution  of  tlic  com- 
petitive traffic?  which  question  must  be  answered  before  jn-oceeding 
to  the  second  part  of  the  inqury :  How  can  rates  be  practically  .idjiisted 
so  as  not  to  interfere  with  the  proper  distribution  of  traffic,  as  ('oiidi- 
tioued  by  the  natural  and  legitimate  elements  of  competition? 

GENERAL  PRINCIPLES  INVOLVED  IN  THE  ADJUSTMENT  OF  TRANSPORTATION 

RATES. 

The  principle  is  generally  recognized,  that  the  rates  between  the 
same  competitive  points  via  different  competing  routes,  should  be  the 
same  for  the  same  service  performed,  and  that  the  rates  between  differ- 
ent points  of  competition  should  be  based  upon  their  relative  distance. 
This  principle  is  carried  out  in  the  whole  territory  in  which  the  roads 
represented  on  the  Joint  Executive  Committee  are  located.  The  rates 
between  New  York  and  Western  competing  points,  say  Chicago,  St. 
Louis  and  Cincinnati,  are  based  upon  the  relative  distances  of  these 
cities  from  New  York.  The  same  principle  was  recognized  in  the  tariff 
of  April  13,  1876,  when  the  rates  from  common  points  West  to  sea- 
board cities  were  based  upon  these  relative  distances;  but  this  tariff 
was  never  adhered  to.  The  pro  rata  principle,  correct  as  it  is,  ab- 
stractly considered,  cannot  be  applied  in  all  cases.  Other  principles 
control  the  adjustment  of  rates,  and  have  to  be  recognized,  and  they 
are  frequently  in  direct  conflict  with  the  pro  rata  principle,  and  the 
most  powerful  factor,  which  overrides  all  other  considerations,  is  com- 
petition. If  there  was  no  competition  for  the  export  traffic  between 
the  Trunk  Lines  or  seaboard  cities,  the  pro  rata  principle  applied  to 
domestic  traffic  would  work  satisfactorily  to  all  parties.  But  as  the 
through  rates  through  the  various  cities  to  foreign  destination  nnist  be 
made  with  a  view  to  meet  competition  in  foreign  markets,  that  is,  must 
be  substantially  the  same  via  all  routes,  and  the  Trunk  Lines  are  simply 
links  in  the  through  route  between  the  common  points  of  competition 
in  this  and  foreign  countries,  the  proportion  of  the  through  rates,  or 
that  portion  of  it  which  the  Trunk  Lines  can  charge,  must  be  deter- 
mined with  regard  to  the  competition  in  export  trade,  and  that  proper- 


24  ATLANTIC    PORT   DIFFERENTIALS 

tioii  may  and  does  greatly  differ  from  the  domestic  rate  established 
upon  a  pro  rata  principle.  Further  complication  arises  from  the  fact, 
that  over  one  link  in  the  through  route — over  the  ocean — the  rates  can- 
not be  predetermined  or  cannot  be  adjusted  by  agreement,  but  are  al- 
ways open  and  always  changing. 

The  difficulties  of  the  adjustment  of  rates  to  the  seaboard  cities  arise, 
therefore,  from  the  dual  position  of  the  Trunk  Lines  as  carriers  of 
domestic  traffic  to  the  seaboard  cities  and  as  competitors  for  through 
European  trade,  having  the  ocean  as  a  link  in  the  through  route.  The 
agreement  of  December  18,  1876,  which  was  the  result  of  long  and  care- 
ful deliberation  by  Trunk  Line  officers  (see  testimony  of  Mr.  George 
R.  Blanchard  before  the  "Special  Railroad  Committee  of  the  New  York 
Assembly,"  from  page  3155  to  page  3156),  recognizes  the  correct  prin- 
ciples upon  which  the  adjustment  of  rates  should  be  based.  It  pro- 
vides that, 

"In  order  to  settle  all  questions  now  at  issue  between  them  (the  Trunk  Lines) 
witli  regard  to  rates  to  and  from  competitive  points  beyond  the  Western  termini 
of  their  roads,  and  to  and  from  competitive  points  East  of  their  Eastern  termini, 
and  to  establish  equal  rates  to  and  from  the  seaboard  upon  all  competitive  business, 
and  adjust  upon  an  equitable  basis  business  purely  local,  do  agree  as  follows: 

"First. —  *  *  *  *  that  all  competitive  freight  shipped  on  through  bills  of  lading 
to  Europe  *  *  *  *  shall  be  at  the  same  through  rate  to  destination,  whether  through 
the  cities  of  Baltimore,  Philadelphia,  New  York,  Boston  or  Portland. 

"Second. — That  all  freight  shipped  to  Baltimore,  Philadelphia  and  New  York, 
and  afterwards  exported,  shall  be  deemed  competitive. 

' '  Third. — That  on  freight  from  all  competitive  points  in  the  West  and  North- 
west to  Baltimore,  Philadelphia  and  New  York,  intended  for  local  use  and  consump- 
tion, the  rates  shall  be  thirteen  (13)  per  cent,  less  to  Baltimore,  and  ten  (10)  per 
cent,  less  to  Philadelphia,  than  to  New  York  from  Chicago ;  and  from  Southwestern 
points  to  Baltimore  fourteen  (14)  per  cent,  less,  and  to  Philadelphia  nine  (9)  per 
cent,  less  than  to  New  York. ' ' 

This  agreement  is,  however,  only  of  a  declaratory  character.  It 
establishes  the  correct  principle  upon  which  rates  should  be  adjusted, 
and  merely  shows  what  it  would  be  desirable  to  accomplish.  It  was 
never  executed,  and  can  never  be,  for  the  following  reason :  It  is  im- 
practicable to  determine  at  any  one  time  the  lowest  ocean  rate  at  the 
several  ports  and  establish  in  connection  with  it  the  same  through  rate 
through  all  ports. 

Several  attempts  were  made  to  carry  out  the  part  of  the  agreement 
contemplating  equal  rates  on  all  shipments  under  through  bills  of 
lading.  A  committee  of  foreign  freight  agents  was  appointed  in  1876, 
and  again  in  1880,  to  receive  daily  the  quotations  of  ocean  rates  from 
all  ports,  and  to  give  the  lowest  quotations  jointly  to  all  Western 
soliciting  agents,  upon  which  they  were  to  establish  the  same  through 
rates  through  the  different  ports.  But  the  ocean  rates  change  from 
day  to  day,  even  from  hour  to  hour,  and  in  order  to  make  the  same 
through  rates  through  all  ports  at  the  same  time,  it  would  be  necessary 


FINK:     ADJUSTMENT   OP   SEABOARD   RATES  25 

that  the  rates  once  established  should  at  least  be  inaiiiliiiiicd  for  som  ■ 
period  of  time  regardless  of  these  changes.  This  would  not  lie  satis 
factory  to  the  exporter,  because,  should  the  ocean  rates  fall,  after 
through  rates  had  been  established,  he  could  not  take  advantngc  of  it. 
and  would  have  to  pay  higher  rates  than  he  could  secure  on  his  own 
account. 

It  was  for  this  reason  that  the  Chambers  of  Commerce  of  a  iimnhcr 
of  the  western  cities,  who  feared  that  the  railroads  intended  to  secur" 
control  of  the  ocean  rates,  entered  a  violent  i)i-otest  when  it  was  at- 
tempted in  ]\Iarch,  1880,  to  carry  out  the  plan  (see  Cireulai-  No.  15;^ 
Joint  Executive  Committee)  of  making  the  through  rates  the  same  ria 
all  ports.  To  the  railroads  this  plan  is  equally  objectionable.  They 
would  have  to  adopt  and  guarantee  for  a  certain  period  of  time  certain 
ocean  rates,  and  in  case  of  an  increase  in  the  ocean  rates,  they  would 
have  to  reduce  their  land  rates  accordingly.  The  ocean  lines  would 
not  be  slow  to  avail  themselves  of  this  feature,  and  the  railroads  would 
have  to  assume  all  the  risk  of,  and  therein^  destroy  the  coiu|)etition  be- 
tween the  ocean  carriers,  which,  if  left  free,  might  be  relied  ui)ou  to 
adjust  ocean  rates  to  the  inland  rates,  and  to  bring  about  the  desired 
equalization  without  any  effort  on  the  part  of  the  railroads. 

In  the  ordinary  course  of  competition  betw-een  the  ocean  cai-riers,  it 
is  certainly  reasonable  to  expect  that  the  rates  from  Baltimoi-e  ami 
Philadelphia  should  always  be  greater  than  from  New  York.  Th.' 
ocean  routes  are  much  longer  than  from  New  York;  the  length  of  time 
and  cost  of  transportation  from  these  ports  must  necessarily  be  greater 
on  that  account,  not  to  mention  the  great  advantages  New  York  pos- 
sesses in  controlling  return  cargoes,  and  its  larger  amouut  of  i)assenger 
and  emigrant  traffic  and  other  commercial  advantages.  I'lider  ordi- 
nary circumstances,  therefore,  according  to  the  law's  of  free  conqieti- 
tion,  the  rate  from  New  York  should  always  be  lower.  But  shouUl  it 
be  found  that  this  is  not  the  case,  it  would  be  strong  proof  that  the 
competition  of  Philadelphia  and  Baltimore  is  not  felt  by  the  large 
shipping  interest  identified  with  New  York,  or  that  there  exist  other 
disturbing  causes.  However  this  may  be,  any  attempt  by  the  railroads 
to  interfere  with  the  free  competition  of  the  ocean  carriers  fi-om  the 
different  cities,  would  result  in  greater  evils  than  the  evils  which  th.y 
seek  to  remedy. 

The  difficulties  encountered,  therefore,  in  attemi)tiiig  to  niaUe  the 
same  rates  at  the  same  time  through  all  ports  on  through  bills  of  lading, 
based  on  the  lowest  ocean  rate  from  any  port,  nuist  be  considered  as 
insurmountable  from  the  very  nature  of  the  transaction. 

The  difficulties  of  dealing  with  the  export  business  shipped  to  the 


26  ATLANTIC    PORT    DIFFERENTIALS 

seaboard  under  domestic  bills  of  lading  are  equally  as  great.  State- 
ment C  shows  that  the  grain  and  flour  traffic  is  72.58  per  cent,  of  the 
total  business  carried  by  the  four  trunk  lines  to  the  seaboard  and  in- 
cluding provisions,  nearly  85  per  cent.  Statement  A  shows  that  80 
per  cent,  of  the  receipts  of  flour  and  grain  at  New  York  are  for  export, 
from  Philadelphia,  64.6  per  cent,  and  from  Baltimore,  84  per  cent. 
]\Iuch  the  larger  portion  of  the  grain  carried  by  the  Trunk  Lines  to  the 
seaboard  is  therefore  export  grain. 

The  grain  shipments  to  Philadelphia,  for  1880,  were  49,000,000 
bushels,  of  which  32,000,000  bushels  were  exported,  leaving  only  17,- 
000,000  bushels  for  home  consumption.  The  shipments  under  through 
bills  of  lading  from  Philadelphia  (see  Statement  A)  were  7.3  per  cent. 
It  follows,  that  58  per  cent,  of  the  total  receipts  at  Philadelphia  were 
shipped  there  under  domestic  bills  of  lading  and  afterwards  exported. 

At  New  York  the  rail  receipts  were  95,000,000  bushels,  80  per  cent, 
of  which  was  exported,  and  of  this  only  18.7  per  cent,  was  exported 
under  through  bills  of  lading,  leaving  61.3  per  cent,  of  the  total  amount 
of  grain  brought  by  the  Trunk  Lines  to  New  York  shipped  under  do- 
mestic bills  of  lading  that  was  afterwards  exported.  A  similar  condi- 
tion of  affairs  is  shown  to  have  existed  at  Baltimore. 

This  shows  the  difficulty  of  readjusting  the  inland  rates  after  ship- 
ments have  been  made  under  domestic  bills  of  lading,  so  that  the 
through  rates  would  be  the  same  via  all  competing  seaboard  cities,  and 
at  the  same  time  the  lowest  that  is  made  via  any  of  these  cities ;  and 
the  conclusion  must  be  formed  that  the  only  practical  plan  to  carry  out 
as  near  as  may  be  possible  the  principles  recognized  as  correct  in  the 
contract  of  December  18,  1876,  is  to  agree  upon  fixed  inland  rates  upon 
the  whole  grain  traffic,  domestic  and  export,  and  to  determine  the 
through  rates  by  adding  the  ocean  rates,  whatever  they  may  be,  from 
time  to  time,  from  the  different  cities  to  points  of  destination,  and  that 
the  adjustment  of  the  inland  rates  to  the  seaboard  must  be  made  more 
with  the  view  to  the  export  trade  than  to  the  domestic  traffic. 

The  agreement  of  April  5,  1877,  recognizes  the  principle  that  fixed 
differences  in  rates  should  be  adopted,  based  upon  the  prevailing  ocean 
rates.  It  is  said  that  a  difference  of  three  cents  in  favor  of  Baltimore 
and  two  cents  in  favor  of  Philadelphia,  corresponded  at  that  time  with 
the  increased  cost  of  ocean  carriage  from  those  ports,  but  that  changes 
have  since  taken  place  in  the  ocean  rates  which  make  a  readjustment 
of  differentials  necessary.  It  becomes,  therefore,  necessary  to  examine 
the  facts,  to  ascertain  what  were  the  ocean  rates,  as  well  as  the  through 
rates  via  the  different  cities  since  this  agreement  was  made,  and  what 
changes  have  taken  place. 


FINK:     ADJUSTMENT   OF   SEABOARD  RATES  27 

AVERAGE  OCEAN  RATES  DURING  THE  LAST  FOUR  YEARS,  AND  COMPARATIVE 
ESTIMATES  OF  COST  OF  TRANSPORTATION  TO  AND  THROUGH   SEA- 
BOARD CITIES  UNDER  PREVAILING  RATES  IN  1880. 

Statement  G  has  been  prepared  to  show  the  quotations  of  oeean  rates 
during  the  hist  four  years,  and  from  it  it  appears  that  the  oeean  rates 
via  steam  from  Philadelphia  to  Liverpool,  whieh  were  four  eents  hi^'ller 
than  from  New  York  in  1877,  were  only  1.7  cents  higlier  in  1880.  and 
from  Baltimore  they  were  4.6  eents  higher  in  1877,  and  2.6  cents  higher 
in  1880.  But  the  rates  via  sail  (to  Cork,  for  orders)  have  not  elmngcil 
to  so  great  an  extent.  They  were  more  nearly  the  same  than  steam 
from  all  points  in  1877,  and  remain  so.  At  Philadelphia,  in  1877,  they 
were  0.2  cents  less  per  hundred  pounds,  and  in  1880,  0.7  eents  less  than 
from  New  York;  and  at  Baltimore  0.3  cents  higher  in  1877,  and  in 
1880,  0.5  cents  higher  than  from  New  York. 

To  ascertain  the  average  rate  from  the  three  ports,  the  relative 
quantities  exported  by  steam  and  sail  have  to  be  taken  into  considera- 
tion. Statement  K  contains  an  estimate  of  the  average  rate  during  the 
whole  of  the  j^ear  1880,  and  also  during  the  first  and  last  six  montiis 
of  the  year.  The  average  oeean  rate  during  the  year,  and  the  dilTer- 
ences  in  the  rates  between  Philadelphia  and  Baltimore  and  New  York, 
were  as  follows: 

Average  Oce.vn  Eates,  Steam  and  Sail,  per  Hundred  Porxos  ix  ISSO. 

From  New  York.  Philadelphia.  Baltimore. 

22.81e.  23.79e.  24.71c. 

Higher  thau  from  New  York,         0.98e.  1.90c. 

It  is  an  important  point  in  the  consideration  of  this  whole  subject, 
whether  it  is  proper  and  right  that  the  actual  differences  in  tiie  ocean 
rates  during  a  year  from  the  different  ports  should  be  taken  as  the 
exact  differences  in  the  inland  rail  rates,  with  a  view  of  making  the 
through  rates  the  same  through  all  ports.  If  this  point  were  conceded, 
the  problem  would  seem  to  be  easily  solved,  by  ascertaining  the  differ- 
ences as  above,  and  making  the  inland  rates  as  much  lower  as  the  ocean 
rates  are  higher.  But  this  solution  is  really  not  quite  so  simple  av  it  jit 
first  sight  appears. 

First. — The  changes  in  ocean  rates  cannot  be  predetermined.  The 
serious  question  arises,  for  what  particular  periods  in  tiie  past  shall 
the  actual  rates  be  taken  as  a  guide,  and  for  what  particular  periods 
in  the  future?  From  Statement  G,  it  appears  that  great  changes  hajv 
taken  place  relatively  in  the  ocean  rates  from  tlie  three  cities  since  1877. 
Are  the  differences  in  ocean  rates  for  one  year  to  be  taken  as  the  differ- 
ences in  inland  rail  rates  for  the  succeeding  year  before  it  can  be  known 


28  ATLANTIC    PORT    DIFFERENTIALS 

what  they  actually  will  be  ?  Even  during-  certain  periods  in  the  same 
year  there  are  marked  differences  in  the  ocean  rates.  For  the  last  six 
months  of  1880  (see  Statement  K),  the  rates  from  Philadelphia  were 
only  0.26c.  higher  than  from  New^  York,  while  in  the  first  six  months 
they  were  1.71  cents  higher.  From  Baltimore  they  were  1.54e.  higher 
than  from  New  York  in  the  last  six  months  of  the  year,  while  during 
the  first  six  months  they  were  2.30  cents  higher.  No  one  can  antici- 
pate the  differences  in  ocean  rates  during  the  w^liole,  or  during  the  dif- 
ferent seasons  of  the  coming  year.  If  differences  in  ocean  rates  upon 
which  inland  rates  were  based  were  less  than  the  actual  difference,  it 
would  be  unjust  to  New  York ;  if  more,  it  would  be  unjust  to  Philadel- 
phia and  Baltimore ;  and  thus  the  distribution  of  traffic  betAveen  com- 
peting roads  and  competing  cities,  if  sought  to  be  regulated  solely  by 
tlie  adjustment  of  inland  rates  upon  the  differences  in  ocean  rates,  for 
fixed  periods  of  time,  would  be  at  best  a  mere  matter  of  guesswork. 
The  average  rates  during  a  whole  year  may  never  prevail  at  any  one 
time,  but  the  actual,  and  not  the  average,  which  is  a  mere  hypothetical 
rate,  control  the  traffic  at  the  time. 

Second. — The  quotations,  as  reported  in  these  statements,  are  only 
of  rates  to  Liverpool  by  steamer,  and  to  Cork,  for  orders,  by  sail.  They 
therefore  apply  only  to  a  small  proportion  of  the  export  business.  To 
what  extent  appears  from  Statement  J,  which  shows  the  destination  of 
the  export  grain  from  New  York,  Philadelphia  and  Baltimore.  The 
grain  destined  to  Liverpool  from  New  York  (about  11,000,000  bushels) 
constitutes  only  10  per  cent,  of  the  total  export  grain  from  New  York, 
while  from  Baltimore  to  the  same  destination  3,500,000  were  sent,  con- 
stituting only  61/0  per  cent,  of  its  total  exports.  The  grain  shipments 
to  Cork,  for  orders,  by  sail  from  New  York,  Avere  19,000,000  bushels 
of  the  total  exports,  or  17.4  per  cent.,  and  from  Baltimore  to  Cork 
about  9,000,000  bushels,  the  same  percentage  of  the  total  shipments  as 
from  New  York.  The  rates  are,  therefore,  practically,  only  ascer- 
tained for  about  27  per  cent,  of  the  New  York,  and  2-1  per  cent,  of  the 
Baltimore  exports. 

The  question  arises:  Is  it  just  and  proper  to  take  the  rates  on  so 
small  a  portion  of  the  competitive  traffic  as  the  standard  for  the  whole 
export  grain?  It  may  be  assumed,  perhaps,  that  the  rates  to  Liver- 
pool by  steam  and  to  Cork  by  sail,  guide,  in  a  measure,  the  rates  to  all 
ports  in  Great  Britain ;  in  that  ease  they  apply  to  57  per  cent,  of  the 
export  grain  trade  from  New  York,  to  49  per  cent,  from  Philadelphia, 
and  to  50  per  cent,  from  Baltimore. 

I  have  not  been  able  to  procure  the  ocean  rates  charged  to  other 
countries  and  to  ascertain  what  are  the  differences  from  different  ports ; 


FINK:     ADJUSTMENT  OP   SEAROAKH   RATES  120 

and  whether  there  are  any  settled  relations  between  those  rates  and 
the  rates  to  Liverpool  and  Cork,  or  whether  tliey  are  made  accidentally 
from  day  to  day  as  there  may  be  a  supply  of  tonnage  in  tiic  Aincri<-aM 
ports  for  export  to  these  countries.  All  this  inforinaticiu  should  1>.' 
had,  in  order  to  determine  deiinitely  to  what  extent  it  is  i)ropcr  and 
right  that  the  quotation  of  Liverpool  and  Cork  rates  should  be  made 
absolutely  the  basis  of  the  difference  in  inland  rates  over  the  TrnnI; 
Lines  for  the  whole  export  grain.* 

In  view  of  the  facts  just  presented:  the  instability  of  ocean  rates, 
and  the  want  of  exact  information  in  regard  to  the  rates  to  all  points 
of  competition,  the  impossibility  of  determining  the  exact  differences 
in  the  rates  that  may  prevail  at  any  one  period,  it  nnist  be  conc'ded 
that  even  if  the  principle  to  adjust  inland  rail  rates  on  the  exact  basis 
of  differences  in  ocean  rates  were  adopted  as  correct,  it  would  i)e  im- 
practicable to  carry  it  into  practice  with  justice  to  all  parties.  To  at 
tempt  it  may  work  injustice  to  those  who  advocate  it  as  well  as  to  those 
who  oppose  it.  It  would  be  a  mere  accident  if  the  interests  of  all 
parties  were  guarded  alike  under  this  plan  of  adjusting  rates. 

THE   EFFECT   OF   THE    COMPETITION    BETWEEN    THE   GRAIN    MAKKKTS    l|'(i\ 
RELATRT]   AD.JUSTMENT  OF   RAIL   RATES. 

The  adjustment  of  railroad  transportation  rates  has.  so  far.  been 
considered  from  the  standpoint  of  the  railroad  companies.  The  i|nes- 
tion  at  issue  concerns  in  an  equal  degree  the  connnercial  coMninniitie> 
competing  with  each  other  for  the  export  grain  trade.  It  is,  therefore, 
necessary  to  consider  it  from  the  broader  standpoint  of  the  merchant-; 
or  the  commercial  communities  engaged  in  the  trade.  The  railroad 
companies,  in  the  settlement  of  this  question,  must  necessarily  repre 
sent  not  only  their  particular  transportation  interests,  but  also  the  in 
terests  of  the  cities  with  which  they  are  closely  allied:  in  faet.  with 
which  their  interests  are  identical. 

This  introduces  a  new  element,  still  further  com])licating  this  already 
greatly  complicated  problem.     The  mere  addition  of  the  iteean  rates 


*Statement  J  possesses  some  interest,- as  showing  llic  relation  of  the  different 
seaboard  cities  to  the  grain  trade  with  foreign  countries.  It  sliows  the  percentage 
of  total  grain  exported  from  the  three  cities  to  the  varions  countries,  and  the  prcv 
portion  this  constitutes  of  each  city's  actual  export.  For  exanii-le:  New  ^  ork 
sends  57  per  cent,  of  its  total  export  grain  to  Great  Britain,  which  forms  M  per 
cent,  of  the  total  received  by  Great  Britain  from  these  three  ports;  Phila-h-Iphi.-i 
sends  48.7  per  cent,  of  its  export  grain,  which  constitutes  only  14  per  cent,  of  the 
total  received  from  these  three  ports;  Baltimore  sends  ore-half  of  its  exjiort  gram. 
which  constitutes  2.5  per  cent,  of  the  total  received  from  these  three j...rfs. 

To  Germany,  New  York  contributed  65  per  cent.,  Ph.hideli.hia  1 .  4  and  H:i  f'- 
more  17.6.  To  France,  New  York  contributed  .-52.1  per  cent.,  I  h,]:.d.I|.hia  lb.,» 
per  cent.,  and  Baltimore  51  per  cent. 


30  ATLANTIC    PORT   DIFFERENTIALS 

to  the  rail  rates,  making  the  same  rates  through  all  ports  upon  traffic 
carried  to  the  seaboard  by  the  railroads,  even  if  it  were  practicable,  is 
not  sufficient  to  solve  the  problem.  There  are  other  means  of  trans- 
portation, by  which  export  grain  is  brought  to  the  seaboard,  and  there 
are  also  conditions  of  a  commercial  nature,  which  necessarily  affect  the 
competition  between  the  different  markets  in  the  same  trade.  It  is  not 
merely  a  question  of  railroad  transportation  rates,  although  that  is,  no 
doubt,  a  very  important  element. 

Assume,  for  the  sake  of  illustration,  that  one  of  the  ports  possessed 
great  commercial  advantages,  which,  with  equal  transportation  rates, 
would  give  it  a  decided  preference,  to  such  an  extent  that  the  whole 
export  business  would  seek  this  port.  Could  it  be  expected  that  the 
other  ports,  less  advantageously  situated,  and  the  railroads  identified 
with  them,  would  be  willing  to  allow  themselves  to  be  debarred  from 
participating  in  the  commerce  of  the  world ;  that  they  would  allow 
their  railroad  facilities,  their  warehouses  and  elevators,  their  capital 
and  investments,  to  lay  idle,  out  of  mere  respect  for  the  abstract  prin- 
ciple that  transportation  rates  to  and  through  all  ports  must  be  the 
same,  regardless  of  any  and  all  other  considerations  that  control  trade 
and  commerce? 

That  New  York  possesses  great  commercial  advantages,  such  as  I 
have  mentioned  heretofore  as  influencing  the  distribution  of  competi- 
tive traffic  (see  page  19  of  this  report),  is  generally  admitted.  One 
of  the  principal  grain  merchants  of  New  York  testified  before  the  ' '  Spe- 
cial Committee  on  Railroads"  of  the  New  York  Assembly  (page  704), 
that  these  advantages  Avere  worth  to  the  grain  trade  of  New  York  one 
cent  per  hundred  pounds.  This,  of  course,  is  a  mere  individual  judg- 
ment, and  its  correctness  cannot  be  mathematically  demonstrated ;  but, 
that  these  advantages  are  worth  something,  cannot  be  denied. 

Some  light  is  thrown  upon  this  subject  b}^  the  experience  of  Boston 
as  a  grain  market.  While  the  inland  rates  to  Boston  are  nominally 
the  same  as  to  New  York  (there  are  reasons  to  suppose  they  are  even 
lower),  the  ocean  rates  from  Boston  are,  as  a  general  rule,  much  lower 
than  from  New  York,  thus  making  the  through  rates  through  Boston 
less  than  through  New  York;  and  yet,  notwithstanding  these  condi- 
tions, which  have  prevailed  for  years — notwithstanding  that  the  rail- 
road and  terminal  facilities  at  Boston  have  of  late  years  been  greatly 
improved — we  find  that  the  grain  receipts  at  Boston  have  remained 
relatively  the  same,  during  the  last  twenty  years.  Boston  has  only 
kept  pace  with  the  other  ports,  notwithstanding  lower  transportation 
rates  through  that  port.  In  1860  it  received  10.4  per  cent.,  or  about 
nine  million  bushels ;  in  1880,  10,88  per  cent,  of  grain,  or  thirty-seven 


FINK:     ADJUSTMENT  OP   SEABOARD   RATES  31 

milliou  bushels;  showing  that  P.oston,  as  a  grain  market,  must  hil)()r 
under  some  disadvantages,  whatever  they  may  be,  tluit  make  h)\V('r 
rail  rates  through  that  port  to  foreign  ports  necessary,  in  onii-r  to 
enable  it  to  retain  a  share  of  the  grain  trade.  Whether  these  disad- 
vantages are  purely  of  a  commercial  nature,  or  whether  the  shijipiiig 
facilities  and  storage  capacity  of  the  port  are  such  as  to  limit  its  ca- 
pacity to  transact  business,  the  facts  stated  are  sufificient  to  indicate 
that  Boston  could  not  maintain  its  proportional  share  of  the  grain 
trade,  at  the  same  through  rates  as  are  made  on  rail  shipments  through 
New  York. 

Besides  the  commercial  advantages  of  New  York,  that  may  mak.- 
these  lower  rates  through  Boston  and  other  ports  necessary,  ami  whidi 
cannot  be  readily  estimated  in  dollars  and  cents,  it  possesses  in  the  canal 
advantages  of  cheaper  transportation,  of  which  some  more  definite  esti- 
mate can  be  formed.  The  Erie  Canal  brings  to  New  York,  in  the  seven 
months,  during  which  it  is  generally  in  use,  a  large  proportion  of  tlic 
total  grain  receipts  at  this  port.  In  1880,  it  brought  sixty-nine  million 
bushels,  or  40  per  cent,  of  the  New  York  receipts,  or  20  per  cent,  of  tli  • 
total  receipts  at  the  five  Atlantic  ports,  as  shown  in  Statemeiil  D.  It 
makes  no  difference  to  the  merchants  in  Boston,  Philadelphia  and  liai- 
timore,  competing  in  the  grain  trade,  how  New  York  receives  its  gr-aiii. 
whether  by  canal  or  rail;  they  can  only  consider  the  cost  at  wliicji  tlif 
grain  is  brought  to  New  York,  regardless  of  the  method.  Tf  tlicy  can- 
not secure  transportation  as  cheaply,  the}^  ma.y  be  de])arrcd  from  cmn- 
peting  Avith  New  York.  In  this  view  of  the  case,  the  cost  of  transiiort- 
ing  grain  to  New  York  by  canal  as  well  as  by  rail  becomes  a  factor  in 
the  adjustment  of  rail  rates  to  other  competing  cities,  wliich  have  not 
the  advantage  of  water  transportation. 

The  effect  of  the  cheaper  canal  transportation  upon  the  average  cust 
of  transportation  to  New  York,  and  relatively  to  other  citi(^s.  will  ap- 
pear from  Statement  L,  which  gives  an  estimate  of  the  cost  of  trans- 
porting grain  to  and  through  New  York,  Philadeljihia  or  Baltimore  via 
all  routes,*  including,  also,  the  cost  of  ocean  transpoi'tatif)n  from  these 
cities,  based  upon  the  statistics  of  1880.     The  following  is  the  resnll  : 

During  the  whole  Year  of  1880. 


New  York.   Philadelphia 


Average  Inland  Eates  per  100  lbs.,  allow- 
ing agreed  differences 

Less  to  New  York 

Less  to  New  York  at  even  rail  rates  from 
all  cities   


25. 69c 


*No  estimate  can  be  made  of  the  cost  of  transportation  through  Bo.ston,  as  tlic 
statistics  of  grain  carried  there  by  the  Grand  Trunk  Railway  are  not  known. 


32 


ATLANTIC    PORT    DIFFERENTIALS 


This  statement  shows  that  in  case  rail  rates  had  been  the  same  in 
1880  to  the  three  cities,  grain  could  have  been  delivered  at  New  York 
for  3.58  cents  less  per  hundred  pounds  than  to  Philadelphia,  and  3.74 
cents  less  than  to  Baltimore ;  and  allowing-  differences  of  two  and  three 
cents  less  to  Philadelphia  and  Baltimore,  respectively,  New  York  still 
had  the  advantage  in  rates  of  1.58  cents  over  Philadelphia,  and  0.74 
cents  over  Baltimore. 

Adding  the  average  ocean  rates  for  the  year  1880  to  the  cost  of  in- 
land carriage,  the  total  cost  (on  the  basis  of  Chicago  to  Liverpool  by 
steam,  and  Cork  by  sail,  for  orders)  has  been  as  follows: 


Through  rate,  allowing  differentials 

Through  at  even  rail  rates   

Diffei'ence  in  favor  of  N.  Y.,  allowing  differentials 
Difference  in  favor  of  N.  Y.,  at  even  rail  rates  .  . . 


N.Y. 


48.. 50c. 
48 .  50c. 


Phila. 


51.06c. 
53.06c. 

2.56c. 

4.56c. 


Bait. 


51.14c. 
54.14c. 

2.64c. 

5.64c. 


This  represents  the  results  of  the  whole  year's  operation;  but  as  the 
canal  competition  only  exists  during  the  navigable  season,  an  estimate 
has  been  made  of  the  average  rate  during  that  season,  and  also  during 
the  j)eriod  when  navigation  is  closed.     The  following  are  the  results : 


N.Y. 


Phila. 


Average  inland  rate  per  100  pounds,  allowing  differ- 
entials   

Difference  in  favor  of  N.  Y.  over  Phila 

Difference  in  favor  of  Baltimore  over  N.  Y 

Difference  in  favor  of  N.  Y.,  at  even  rail  rates 

Total  through  rate,  adding  the  ocean  rate,  during  the 
last  six  months  of  the  year,  allowing  differentials  . 

In  favor  of  N.  Y.,  allowing  differentials 

In  favor  of  N.  Y.,  at  even  rail  rates 


24.21c. 


49.82c. 


25.07e, 
0.86c. 


2.86e. 

50.94c. 
1.12c. 
3.12e. 


Bait. 


24.14c. 


0.07e. 
2.93c. 

51.29c. 
1.47c. 
4.47c. 


After  allowing  a  difference  in  rates  of  two  and  three  cents  to  Phila- 
delphia and  Baltimore,  New  York  had  the  advantage  in  rates  of  1.12 
cents  over  Philadelphia,  and  1 .47  cents  over  Baltimore,  during  the  sea- 
son of  navigation.  This  results  from  the  lower  cost  of  transportation 
by  canal. 

During  the  time  of  closed  navigation,  when  grain  was  transported 
only  by  rail  to  the  three  cities,  the  average  ocean  rates  (see  Statement 
K)  were  as  follows: 


FINK:     ADJUSTMENT  OF   SEABOARD  RATES  33 

From New  York Philadelphia Baltimore. 

20.01c 21.72c 22..'?  1c. 

In  favor  of  N.  Y.   . . . .         —  ....  1.71c.  ....  2.30c. 

Allowing  the  differences  in  rail  rates  of  two  cents  to  Philadelphia 
and  three  cents  to  Baltimore,  the  average  through  rates  on  e.xport  grain 
during  the  season  of  closed  navigation  were : 

In  favor  of  Philadel]ihia 0 .  29c. 

In  favor  of  Baltimore  0.  70c. 

While  during  the  navigable  season  they  were : 

In  favor  of  New  York  over  Philadelphia 1. 12p, 

In  favor  of  New  York  over  Baltimore  1 .  47c. 

These  are  the  facts  furnished  by  the  experience  of  1880  in  regard 
to  transportation  rates  on  export  grain,  as  bearing  upon  the  general 
competition  between  the  cities  apart  from  the  special  railroad  interest. 

To  what  extent  the  advantages  in  rates  in  favor  of  New  York  during 
the  season  of  navigation  (they  were  less  1.12  cents  than  via  Philadel- 
phia, and  1.47  cents  less  than  via  Baltimore)  are  counterbalanced  by 
the  slower  method  of  canal  transportation — whether  this  is  or  is  not  a 
disadvantage,  the  other  ports  receiving  grain  by  rail  during  the  whole 
year,  or  to  what  extent  the  difference  in  rates  in  favor  of  Baltimore 
and  Philadelphia  during  the  close  of  the  canal  (they  were  0.29  cents 
and  0.70  cents  less  per  100  lbs.  respectively  via  these  two  cities),  are 
counterbalanced  by  the  commercial  advantages  of  New  York,  are  ques- 
tions that  must  be  left  to  individual  judgment,  as  no  arithmetical  esti- 
mate can  be  made. 

Upon  the  whole,  looking  at  the  results  during  each  of  the  two  periods 
of  the  year  (the  average  of  the  whole  year  cannot  be  used  as  a  cri- 
terion), it  would  seem  that  the  differences  in  rates  agreed  upon  on 
April  5,  1877,  are  certainly  a  remarkably  close  approximation  to  th<> 
actual  results  of  the  year  1880,  if  equality  of  through  rates  through 
all  ports  upon  the  whole  export  grain  is  considered  the  end  to  be  at- 
tained. 

OCEAN   RATES   ADJUST   THEMSELVES   TO   INLAND    RATES. 

The  near  approach  to  an  equalization  of  through  rates  through  all 
ports,  including  the  grain  brought  by  canal  to  New  York  during  all 
seasons  of  the  year,  is  not  altogether  accidental.  There  is  a  compen- 
sating principle  at  work  in  ad.iusting  ocean  rates  to  the  inland  rates, 
which  has  the  natural  tendency  to  equalize  through  rates  without  the 
aid  of  the  railroads.  The  law  upon  which  this  principle  works  sc.mus 
to  be  fullv  revealed  by  the  facts  recorded  in  the  accompanying  state- 
ments, a  study  of  which  will  throw  a  great  deal  of  light  upon  the  whole 
question,  and  greatly  simplify  its  solution. 
3 


34 


ATLANTIC    PORT   DIFFERENTIALS 


During  the  first  and  second  six  months  of  the  year  1880,  correspond- 
ing nearly  with  the  periods  of  closed  and  open  navigation,  the  average 
ocean  rates,  per  100  lbs.,  were  as  follows : 


From 

New  York. 

Philadelphia. 

Baltimore. 

During  the  first  six  months  of  1880 

During  the  second  six  months  of  1880  .... 
Increase  in  the  second  six  months 

20.01c. 
25.61c. 
5.60c. 

21.72c. 

25.87c.] 

4.15c. 

22.31e. 

27.15c. 

4.84c. 

"With  the  lowering  of  the  inland  rates  via  rail  and  canal,  the  ocean 
rates  from  the  three  cities  advanced,  and  were  higher  during  the  season 
of  navigation  than  they  were  during  the  season  of  closed  navigation. 
This  increase  in  the  ocean  rates  had  the  effect  of  making  the  through 
rates  from  Western  points  to  European  points  through  all  the  cities 
(taking  the  inland  and  ocean  rates  together),  very  nearly  the  same 
during  the  season  of  navigation  as  the  average  of  the  whole  year,  al- 
though the  inland  rates  were  much  lower  during  the  season  of  naviga- 
tion. 


The  through  Eates  were  from New  York.      Philadelphia.     Baltimore. 

During  season  of  navigation 

Average  during  the  year 

49.82c. 
48.50c. 

50.94c. 
51.06c. 

51.29c. 
51.14c. 

This  shows  that  the  reduction  in  the  inland  rates  during  the  summer 
months  via  canal  and  rail  benefited  only  the  ocean  carriers  (a  fact  that 
should  be  kept  in  view,  in  considering  the  wisdom  of  the  contemplated 
abolition  of  tolls  on  the  New  York  State  canal) .  But  a  more  important 
fact  is  brought  to  light  by  these  figures,  viz. :  That  the  ocean  rates  ad- 
vanced a  great  deal  more  during  the  season  of  navigation  from  New 
York  than  they  did  from  the  other  two  cities.  The  advance  in  New 
York  was  5.60  cents,  Philadelphia  4.15  cents,  Baltimore  4.84  cents  per 
1 00  pounds. 

The  greater  increase  from  New  York  made  the  difference  in  the  ocean 
rates  between  the  three  ports  during  the  season  of  navigation  much  less. 


Philadelphia. 

Baltimore. 

During  the  last  six  months 

They  were  during  the  first  six  months  of  1880  .... 

0.26c. 
1.71c. 

2.30c. 

1.54c. 

FINK:     ADJUSTMENT  OF   SEABOARD  RATES  35 

Showing  plainly  that  either  the  reduced  rates  of  inland  transporta- 
tion by  canal  (the  canal  rates  were  5.3  cents  less  than  the  all  rail  rates) 
or  the  greater  demand  for  tonnage  on  account  of  the  increased  receipts 
of  grain  at  New  York,  caused  a  greater  increase  in  the  ocean  rates 
from  New  York  than  from  the  other  cities,  and  more  nearly  equalized 
the  through  rates  through  these  cities,  still  giving  to  New  York  the  ad- 
vantage of  1.12  cents  over  Philadelphia  and  1.47  cents  over  Baltimore. 

It  is  of  course  impossible  to  state  to  which  of  these  two  causes  the 
increased  ocean  rates  must  be  ascribed ;  but,  in  either  case,  it  is  due  to 
the  fact  that  New  York  possesses  a  canal  and  cheaper  transportation 
facilities  than  the  other  cities. 

It  is  not  positively  known  that  the  differences  of  two  and  three  cents 
were  fully  maintained  during  1880.  If  it  be  true,  as  it  is  stated,  that 
concessions  were  made  by  the  New  York  roads,  it  might  explain  the 
fact  that  the  ocean  rates  at  Baltimore  were  during  the  winter  season 
only  2.3  cents  higher,  corresponding  to  a  probable  reduction  of  0.7 
cents  per  one  hundred  pounds  in  the  inland  rate  to  New  York,  or  re- 
duced elevator  charges.  This,  of  course,  is  a  mere  conjecture.  The 
fact,  however,  seems  to  be  established,  that  the  ocean  rates  adapt  them- 
selves to  the  inland  rates,  during  navigation,  when  lower  rates  prevail 
to  New  York,  as  well  as  during  closed  navigation,  when  lower  inland 
rates  prevail  to  Philadelphia  and  Baltimore. 

These  conclusions,  however,  are  based  only  upon  the  experience  of 
the  year  1880.  But,  as  during  that  year  the  agreed  rates  were  more 
nearly  maintained  than  in  any  previous  year,  the  results  obtained  may 
be  considered  more  reliable  than  in  other  years,  during  which  violent 
changes  in  rates  took  place,  and  no  clear  knowledge  of  the  rates  actually 
charged  during  all  periods  can  be  obtained. 

But  the  year  1880  is  not  the  only  year  in  Avhich  the  facts  just  men- 
tioned were  developed.  During  the  first  four  months  of  1881,  when 
inland  rates  were  still  maintained,  the  ocean  rates  from  Baltimore  were 
2.74  higher  than  from  New  York  (see  Statement  H),  while  during  the 
succeeding  seven  months  they  were  only  0.3  cents  higher.  The  latter 
were  the  differences  in  ocean  rates  during  the  railroad  war,  when  prob- 
ably there  was  a  nearer  approach  to  equality  in  the  inland  rates  via 
all  routes  to  all  cities  (the  canal  rates  being  nearly  the  same  as  the 
rail  rates) ,  showing  that  whether  differentials  are  maintained  or  not, 
free  ocean  competition  acts,  at  least  in  a  great  measure,  as  an  equalizer 
of  the  through  rates. 

From  Statement  G,  it  also  appears  that  the  difference  in  ocean  rates 
between  New  York  and  Baltimore  followed  the  same  law  in  previous 


36  ATLANTIC    PORT   DIFFERENTIALS 

years.    The  differences  in  favor  of  New  York,  in  rates  to  Liverpool  by 
steam,  were : 

First  six  months  of  1887,  5.9c.  Second  six  months,  3.3c. 

"      "        "        "    1878,  4.7c.  "  "        "  2.7c. 

"       "        "        "    1879,  S.Oe.  "  "        "  1.9c. 

Sail  rates  to  Cork  for  orders,  from  Baltimore,  were : 

First  six  months  of  1877,  1.7c.  more.     Second  six  months  of  1877,  1.0c.  less. 
"       "        "        "    1879,  0.8c.     "  "  "         "        "    1879,  0.7c.    " 

Tlie  year  1878  was  an  abnormal  year,  as  the  rail  and  canal  rates 
during  the  first  half  of  the  year  were  lower  than  during  the  last  half ; 
consequently,  we  see  from  Statement  G,  that  the  ocean  rates  were 
higher  during  the  first  six  months  than  during  the  last  six. 


There  were  by  Steam  to  Liverpool  from 

'  N.  Y. 

Phila. 

Balk 

During  the  first  six  months  of  1878   

27.3c. 

29 .  7c. 
26.7c. 

32.0c. 

During  the  second  six  months  of  1878 

23.0c. 

25.7c. 

Although  apparently  these  results  are  contradictory  to  the  general 
rule,  according  to  which  ocean  rates  should  be  lower  in  the  winter 
season  than  in  the  summer,  they  really  establish  its  correctness. 

Besides  the  evidence  of  these  statistics,  we  have  the  testimony  before 
the  "Special  Railroad  Committee"  of  the  New  York  Assembly,  to  the 
same  effect.  IMr.  William  Volkens,  a  member  of  one  of  the  largest 
shipping  firms  in  the  country,  saj^s,  on  page  665 : 

" Ansirer. — Grain  freights  from  Baltimore  to  European  ports  are  generally  from 
3d.  to  6d.  (1.25  cents  to  2.5  cents,  per  100  lbs.)  higher;  1  have  known  instances  of 
9d.  to  a  shilling  (3.75  to  5  cents  per  100  lbs.)  higher  than  from  New  York;  but 
now  in  the  summer  time,  when  the  canal  brings  so  much  more  stuff  to  New  York, 
the  rates  are  about  the  same  as  from  Baltimore. 

"Question. — In  the  summer  the  rates  from  Baltimore  are  about  the  same  as  from 
New  York? 

"Answer. — Not  always,  but  sometimes;    frequently  in  the  height  of  summer." 

Mr.  David  Bingham,  in  his  answer  to  the  question,  how  much  higher 
the  ocean  rates  are  from  Baltimore  than  from  New  York  (page  702) 
saj's : 

"By  steam  about  a  penny  a  bushel  (3.3  cents  per  100  lbs.),  and  perhaps  a  penny 
half-penny  a  quarter  (0.6  cents  per  100  lbs.)  by  sail,  but  ,inst  now  (June  23,  1879,) 
the  rates  are  lower  in  Baltimore  than  they  are  in  New  York,  owing  to  the  increased 
quantity  of  grain  coming  this  way. ' ' 

There  can  therefore  be  no  doubt  that  the  cheaper  canal  transpor- 
tation to  New  York,  either  directly  or  through  the  consequent  increase 
in  grain  receipts  at  New  York,  affects  the  differences  in  ocean  rates 
from  the  different  cities,  and  in  an  adjustment  of  rail  rates  to  these 


FINK:     ADJUSTMENT   OF   SEABOARD   RATES  37 

different  cities,  if  it  is  to  be  based  upou  the  differences  in  the  prevailing 
ocean  rates,  the  influence  of  the  canal  as  a  competing  element  cannot 
be  ignored.  If  the  difference  in  ocean  rates  from  the  competing  cities 
are  wiped  out  by  the  canal  influence  in  directing  the  grain  to  New 
York,  as  it  appears  to  be  the  case,  it  does  not  follow  that  the  differences 
in  the  inland  rail  rates  to  these  cities  should  also  be  wiped  out.  The 
very  conditions  that  give  to  New  York  the  preference  in  inland  rates, 
as  well  as  establish  it  as  the  first  grain  market  of  the  country,  cannot 
justly  be  assigned  as  a  reason  for  depriving  Baltimore  and  Philadel- 
phia of  such  advantages  as  they  may  possess  in  a  shorter  and  cheaper 
inland  carriage. 

The  estimates  of  the  average  cost  of  transportation,  submitted  in 
Statement  L,  are  based  upon  the  rates  that  actually  prevailed  during 
the  year  1880,  by  all  routes,  including  the  canal,  and  are  believed  to  be 
substantially  correct. '  But  for  the  present  purpose  it  does  not  matter 
whether  they  are  exactly  correct  or  not,  as  I  merely  wish  to  use  them 
as  an  illustration  of  the  facts  and  principles  involved  in  this  problem. 
These  estimates  show  that  the  average  cost  of  transporting  grain  to 
New  York  during  the  navigable  season,  was  24.21  cents  per  100  pounds, 
and  to  Baltimore  24.14  cents,  assuming  that  the  differences  in  rate 
of  3  cents  in  favor  of  Baltimore  had  been  strictly  maintained.  The  all- 
rail  rate  to  New  York  is  estimated  at  27.5  cents  (the  nominal  tariff' 
was  30  cents).  Assuming,  for  the  sake  of  argument,  that  the  ocean 
rates  were  the  same  from  both  ports,  and  that  the  Baltimore  merchants 
would  have  had  to  pay  the  same  all-rail  rate  as  to  New  York,  27.5  cents, 
when  the  average  cost  to  New  York  merchants,  including  canal  trans- 
portation, during  the  season  of  navigation,  did  not  exceed  24.21  cents 
per  hundred  pounds,  the  question  may  well  be  asked :  Whether  Balti- 
more could  under  such  conditions  have  secured  a  share  of  the  grain 
trade?  Considering  further,  that  the  average  ocean  rate  by  steam 
and  sail  during  the  navigable  season  of  1880,  was  1.54  cents  higher,  and 
consequently  the  through  rate  via  Baltimore  4.47  cents  higher  than  via 
New  York,  it  could  hardlj^  be  expected  that  with  equal  inland  rates 
Baltimore  could  have  competed  with  New  York  in  the  grain  market. 

The  principle,  that  the  through  rates  from  common  points  in  the 
West  to  common  points  in  Europe,  should  be  the  same  via  all  ports, 
which  is  insisted  upon  by  New  York  merchants  as  correct,  would  cer- 
tainly not  have  been  carried  out.  There  can  hardly  be  any  doubt  that 
in  the  adjustment  of  transportation  rates,  the  effect  of  the  lower  rates 
of  transportation  via  canal  to  New  York  upon  the  relative  price  of 
grain  in  the  different  markets,  must  be  taken  into  consideration  b}-  the 
merchants  in  the  competing  cities. 


463558 


38  ATLANTIC    PORT   DIFFERENTIALS 

But  a  more  difficult  question  arises  between  the  railroad  companies 
themselves.  The  adjustment  of  the  rail  rates  to  Baltimore  and  Philadel- 
phia upon  the  basis  of  the  average  rates  to  New  York,  including  the 
canal  rates,  necessarily  result  in  lower  rail  rates  to  Philadelphia  and 
Baltimore  than  to  New  York.  The  question  may  well  be  asked :  "  If  the 
New  York  railroads  can  carry  grain  in  competition  with  the  canal,  at 
certain  increased  rates  over  the  canal  rates,  why  cannot  the  Philadel- 
phia and  Baltimore  roads  do  the  same,  assuming  ocean  rates  to  be  the 
same  from  all  ports?" 

Looking  upon  the  subject  simply  in  this  light,  disregarding  all  other 
facts  which  have  a  bearing  upon  the  adjustment  of  competitive  rates, 
the  New  York  roads  have  a  right  to  objec*  to  differentials  in  favor  of 
Baltimore  and  Philadelphia. 

But  is  it  possible  to  deal  with  this  question  as  simply  one  of  railroad 
competition,  when  it  is  complicated  with  so  many  other  conditions  that 
act  and  react  upon  it,  and  which  in  the  practical  solution  of  the  prob- 
lem cannot  be  ignored? 

The  New  York  railroads  must,  in  the  first  place,  adjust  their  rates 
with  the  view  of  directly  meeting  the  canal  competition.  Experience 
shows  that  they  can  charge  more  than  the  routes  via  lake  and  canal, 
including  the  insurance  on  the  water  routes.  Were  the  New  York 
railroads  to  attempt  to  make  their  charges  the  same,  it  could  only  lead 
to  ruinous  competition,  which  would  make  the  business  unprofitable, 
both  to  the  railroads  and  to  the  canal,  and  practically  wipe  out  the 
advantages  of  the  canal  to  New  York. 

We  find  that  during  the  navigable  season  of  1880,  when  rail  rates 
were  kept  unusually  high,  (5.3  cents  higher  than  by  lake  and  canal, 
2.25  cents  higher  than  by  lake  and  rail)  the  railroads  were  enabled 
to  carry  46  per  cent,  of  the  grain  to  New  York — the  canal  carrying 
54  per  cent. ;  while  in  1876,  during  the  war  of  rates,  when  rail  rates 
were  very  low — perhaps  as  low  as  the  canal  rates,  if  not  lower — the 
railroads  carried  65  per  cent.,  and  the  canal  only  35  per  cent.  But 
the  total  receipts  at  New  York,  by  all  routes,  were  less  during  that  year 
than  during  any  previous  year  since  1865.  It  is  therefore  evident  that 
it  is  the  true  policy  of  the  New  York  roads  to  keep  their  rail  rates 
sufficiently  above  the  canal  rates,  to  secure  for  themselves  a  reasonable 
remuneration  for  their  services,  and  at  the  same  time  to  secure  to  New 
York  some  of  the  advantages  of  canal  transportation. 

Having  adjusted  the  all-rail  rates  to  New  York  with  this  end  in 
view,  the  question  next  arises :  What  shall  be  the  rail  rates  to  Phila- 
delphia, Baltimore,  and  Boston,  which  will  enable  these  cities  to  secure 
a  reasonable  share  of  the  traffic,  proportionate  with  their  facilities  of 


PINK:     ADJUSTMENT   OF   SEABOARD   RATES  39 

transportation  and  their  commercial  ability  to  transact  the  business? 
The  transportation  rates  to  the  other  cities  must,  of  course,  be  adjusted 
to  meet  the  combined  influence  of  rail  and  water  transportation  upon 
the  price  of  grain  in  New  York.  No  mathematical  solution  of  this 
question  is  possible,  but  this  conclusion  may  be  fairly  drawn  from  these 
considerations:  Assuming  the  ocean  rates  to  be  the  same  from  all 
cities,  then,  if  the  railroads  were  to  charge  the  same  inland  rail  rates 
to  Baltimore  and  Philadelphia  as  are  charged  to  New  York,  it  would 
leave  the  full  advantage  of  the  lower  canal  rates  to  New  York,  and 
would  wipe  out  entirely  the  natural  advantages  which  Baltimore  and 
Philadelphia  possess  in  the  shorter  and  cheaper  railroad  transportation 
to  the  seaboard. 

In  connection,  however,  with  this  question,  it  must  also  be  considered 
that  the  cheaper  rates  of  canal  transportation  are  due  to  the  inferiority 
of  the  services  rendered  by  the  canal,  and  for  this  reason  certain  allow- 
ances should  be  made  for  the  greater  length  of  time,  and  such  other 
disadvantages  as  may  exist,  on  canal  transportation,  as  compared  with 
transportation  by  rail.  It  would  be  difficult  to  estimate  these  disad- 
vantages in  dollars  and  cents,  as  it  is  not  unfrequently  the  case  that 
shippers  prefer  canal  to  rail  transportation,  the  additional  time 
required,  during  which  storage  room  is  provided  for  the  grain,  is  some- 
times an  advantage.  Grain  that  is  brought  by  the  canal  to  New  York 
at  the  rate  of  five  cents  less  per  hundred  pounds  than  by  rail,  after  it 
has  been  stored  in  a  warehouse,  awaiting  export,  is  certainly  worth 
as  much  in  the  market  as  grain  that  has  been  carried  to  New  York  by 
rail. 

These  are  all  subjects  for  consideration,  and  I  merely  wish  to  call 
attention  to  them,  without,  of  course,  being  able— and  I  suppose  no 
man  is  able— to  fix,  precisely,  in  dollars  and  cents  the  advantages  or 
disadvantages  to  New  York  of  canal  transportation  as  compared  with 
all-rail  transportation. 

GENERAL    CONCLUSIONS. 

I  have  endeavored  to  examine  carefully  the  nature  of  the  disagree- 
ment between  the  Trunk  Lines  upon  the  question  of  differences  in 
transportation  rates  to  the  seaboard  cities,  in  the  hope  that  the  conflict- 
ing views,  each  of  which  may  be  correct  in  itself,  might  be  reconciled, 
and  the  subject  could  be  dealt  with  from  some  general  principles,  upon 
which  all  parties  could  agree.  The  conclusions  at  wliich  I  arrive  are 
the  following : 

The  claim  of  the  Baltimore  and  Ohio  and  Pennsylvania  Railroad 
Companies  for  lower  inland  rail  rates  is  based  upon  the  general  prin- 


40  ATLANTIC    PORT   DIFFERENTIALS 

ciple  that  the  transportation  charges  should  be  regulated,  at  least  to 
some  degree,  in  accordance  with  the  length  of  the  competing  routes. 
While  this  is  perfectly  correct  so  far  as  the  domestic  traffic  is  con- 
cerned, it  will  be  admitted  that  in  regard  to  all  competitive  traffic  the 
■distance  forms  no  element.  The  lowest  through  rates  established  by 
any  one  competing  route  establishes  the  through  rates  by  all  others, 
regardless  of  distance. 

If  it  were  true  that  grain  could  be  transported  from  common  points 
West  to  common  points  in  Europe  at  lower  total  rates  through  Balti- 
more than  through  New  York,  assuming  that  all  routes  possess  the  same 
advantages  to  the  shipper,  and  that  the  ocean  rates  are  the  same  from 
all  ports,  the  position  of  the  Baltimore  and  Philadelphia  railroads  that 
they  must  have  lower  inland  rates,  simply  because  their  inland  routes 
are  shorter,  could  not  be  maintained,  no  matter  how  short  their  routes 
might  be. 

This  general  principle  was  fully  recognized  in  the  convention  of 
December,  1876,  and  in  the  agreement  of  December  18,  1876,  It  is 
difficult  to  see  how  any  other  rule  could  lead  to  any  other  result  than 
continual  warfare  between  competing  transportation  lines. 

On  the  other  hand,  the  New  York  railroads,  while  insisting  upon  the 
practical  enforcement  of  this  principle,  do  not  go  far  enough  in  its 
application.  They  intend  to  restrict  it  simply  to  the  competition  be- 
tween the  railroads,  disregarding  other  transportation  routes  affecting 
the  competition  between  the  commercial  communities.  But  if  the  New 
York  railroads  insist  that  the  railroad  competition  alone  shall  be  taken 
into  accovuit,  the  claim  of  the  Philadelphia  and  Baltimore  railroads  for 
lower  transportation  charges  on  account  of  their  shorter  and  cheaper 
routes  to  the  ocean,  would  thereby  be  justified.  The  principle  of  ad- 
justing rates  with  the  view  of  enabling  the  different  cities  to  compete 
with  each  other  upon  equal  footing,  must  either  be  adopted  throughout, 
or  need  not  be  adopted  at  all. 

The  only  common  ground  that  all  parties  to  this  contest  can  occupy, 
would  seem  to  be  that  the  through  rates  on  all  competitive  business 
should  be  made  alike,  or  as  nearly  so  as  may  be  practicable,  upon  the 
whole  competitive  traffic,  and  not  only  upon  the  railroad  traffic.  This 
principle  being  once  acknowledged,  then  the  question  would  arise  as  to 
the  practical  adjustment  of  rates  upon  that  basis.  If  it  were  true  that 
the  ocean  rates  from  all  the  ports  were  the  same,  then  there  should  be 
no  objection  that  the  average  inland  rates  by  all  routes  (water  and  rail) 
should  also  be  the  same,  making  allowance,  of  course,  for  the  disad- 
vantages of  routes,  if  they  exist. 

It  has  been  taken  for  granted  in  the  late  discussion  of  this  subject, 


FINK:     ADJUSTMENT   OF   SEABOARD   RATES  41 

both  in  railroad  and  commercial  circles,  that  the  ocean  rates  from  the 
three  cities  are  now  practically  the  same,  and  this  is  the  foundation 
for  the  claim  that  the  inland  rates  should  be  the  same.  But  are  the 
ocean  rates  really  the  same?  The  statements  herewith  submitted  do 
not  show  that  they  are.  INIisapprehension  has  been  created  by  dealing 
with  the  average  ocean  rates  for  the  whole  year.  It  will  be  readily  seen, 
that  if  the  ocean  rates  during  six  months  of  the  year  were  three  cents 
lower  from  Baltimore  or  Philadelphia  than  from  New  York,  and  for 
the  other  six  months  they  were  three  cents  higher,  the  average  for  the 
year  would  show  that  the  rates  were  the  same.  Yet  as  competition  is 
carried  on  from  day  to  day,  and  under  different  conditions  during 
different  seasons  of  the  year,  the  rates  prevailing  each  day,  and  not 
the  average  rates  for  the  year,  which  may  never  be  charged,  control 
the  business. 

During  the  first  four  months  of  this  year  (see  Statement  H)  the 
average  ocean  rates,  steam  and  sail,  were  2.74  cents  higher  from  Balti- 
more than  from  New  York.  It  is  not  probable  that  Baltimore,  during 
those  four  months,  could  have  secured  any  business  at  the  same  inland 
rate  and  adding  the  higher  ocean  rate.  From  May  to  November  of  this 
year  the  average  ocean  rates,  steam  and  sail,  were  only  0.3  cents  higher 
from  Baltimore  than  from  New  York;  while  in  1880  they  were  1.54 
cents  higher ;  and  yet  we  do  not  find  that  the  reduction  in  ocean  rates 
in  1881  gave  to  Baltimore  more  than  its  usual  proportion  of  the  grain 
business,  in  fact  its  grain  receipts  have  been  considerably  less. 

The  great  fluctuations  constantly  taking  place  in  the  ocean  rates  at 
different  seasons  of  the  year,  under  the  ever  changing  conditions  of 
commerce,  make  it  entirely  impracticable  to  vary  the  inland  rates  from 
day  to  day  as  the  ocean  rates  may  vary.  No  man,  be  he  ever  so  wise,  can 
foretell  what  will  be  the  difference  in  the  ocean  rates  during  any  par- 
ticular period  in  the  future,  and  the  plan  of  equalizing  the  through 
rates,  based  upon  the  sum  of  ocean  and  inland  rates,  can  never  be  suc- 
cessfully carried  out.  It  is  therefore  fortunate  that  we  have  evidence 
that  the  ocean  rates  adapt  themselves  to  the  inland  rates  with  more  pre- 
cision than  human  wisdom  could  devise.  This  is  the  one  redeeming 
feature  in  this  whole  intricate  problem,  and  which  may  be  relied  upon, 
in  a  great  measure,  for  an  equalization  of  the  through  rates  through  the 
different  cities. 

From  this  view  of  the  ease  it  would  seem  that  too  much  stress  has 
been  laid  upon  the  necessity  of  a  nice  adjustment  of  inland  rates,  from 
the  operation  of  which  it  is  expected  that  each  of  the  railroads  and  each 
of  the  cities  should  get  exactly  that  proportion  of  the  competitive 
traffic  to  which  it  may  consider  itself  entitled.     This  expectation  is 


42  ATLANTIC    PORT   DIFFERENTIALS 

entertained  in  face  of  the  fact  that  differential  rates  heretofore  have 
never  been  observed  whenever  they  came  in  conflict  with  the  more 
legitimate  conditions  of  competition ;  and  there  is  not  the  least  prospect 
that  they  ever  will  be  maintained,  nor  ought  they  to  be,  if  they  operate 
unjustly  toward  any  of  the  railroads  or  communities  affected  by  them. 
Relying,  in  a  great  measure,  upon  the  ocean  rates  to  adapt  themselves 
to  the  inland  rates,  and  bearing  in  mind  that  the  distribution  of  traffic 
between  the  Trunk  Lines  and  cities  is  controlled  by  other  conditions 
than  mere  agreements  as  to  rates,  a  fact  that  is  well  established  by  the 
constancy  with  which  this  traffic  divides  itself,  regardless  of  trans- 
portation rates,  the  true  plan  evidently  is,  to  agree  upon  a  proper  dis- 
tribution of  that  traffic  at  its  source,  if  possible,  and  then  to  allow  it 
to  flow  to  the  different  cities  according  to  the  natural  laws  of  trade. 
The  rates  should  be  sufficiently  flexible,  and  might  be  changed  from 
time  to  time,  so  as  to  secure  to  the  competing  lines  the  agreed  amount 
of  traffic  based  upon  the  distribution  of  traffic  as  it  took  place  under 
free  competition.  This  is  a  much  more  direct  and  practical  way  of 
securing  justice  to  each  road,  than  to  attempt  to  predetermine  and 
enforce  rates,  under  the  impression  that  this  could  bring  about  a 
satisfactory  division  of  traffic. 

There  is  no  danger  that  under  this  plan  any  one  city  would  be  dis- 
criminated against.  None  of  the  Trunk  Lines  are  exclusively  identified 
with  any  one  of  the  cities ;  they  are  interested  in  the  traffic  of  all,  and 
they  desire  to  serve  all.  The  New  York  Central  and  Hudson  River 
Railroad  forms  part  of  lines  to  Baltimore,  Philadelphia  and  Boston,  as 
well  as  to  New  York.  The  New  York,  Lake  Erie  and  Western  Railroad 
is  interested  in  Boston  and  Philadelphia,  as  well  as  in  New  York ;  and 
the  Pennsylvania  Railroad  serves  the  four  cities.  The  Baltimore  and 
Ohio  Railroad,  more  exclusively  a  Baltimore  railroad,  is  seeking  for  a 
separate  entrance  into  New  York.  Forty  per  cent,  of  the  Eastbound 
tonnage  received  at  Philadelphia  is  carried  there  by  the  New  York 
roads ;  80  per  cent,  of  the  Boston  business  is  carried  there  by  the  New 
York  roads ;  7  per  cent,  of  the  Baltimore  business  is  carried  there  by 
New  York  roads,  and  40  per  cent,  by  the  Pennsylvania  Railroad.  The 
Pennsylvania  Railroad  contributes  20  per  cent,  to  the  New  York 
business. 

The  idea  that  any  one  of  these  railroads,  after  having  made  large 
investments  to  secure  business  to  all  cities,  is  working  exclusively  in 
favor  of  any  one  and  against  all  others,  is  not  borne  out  by  the  facts  in 
the  case.  They  are  interested  in  the  prosperity  of  all ;  and  although 
each  may  show  a  natural  preference  to  the  city  with  M^hicb  it  is  more 
closely  identified,  it  is  not  in  a  position  to  discriminate  unjustly  against 


PINK :     ADJUSTMENT   OF   SEABOARD   RATES  43 

the  others,  except  at  a  loss  of  a  large  amount  of  revenue.  The  control- 
ling principle  of  each  of  the  Trunk  Lines  is  to  do  all  the  business  it  can 
secure  for  any  city.  The  Pennsylvania  Kailroad  certainly  would  not 
continue  to  carry  freight  to  New  York  if  it  were  an  injury  to  Phila- 
delphia; nor  would  the  New  York  Central  and  Erie  roads  carry  to 
Baltimore,  Philadelphia  and  Boston  if  it  were  an  injury  to  New  York. 
They  could  easily  confine  their  business  to  any  one  city  if  they  desired 
to  discriminate  in  its  favor,  by  charging  higher  rates  to  the  other  cities ; 
but  each  company  carries  (as  common  carriers  should  do)  business 
wherever  it  is  wanted,  and  to  the  full  extent  of  its  capacity ;  and  the 
fact  that  they  do  this  is  alone  sufficient  evidence  that  they  have  no 
desire  to  discriminate  in  favor  of  or  against  any  one  city,  but  propose 
to  allow  the  traffic  to  flow  according  to  the  laws  of  trade  and  commerce. 

I  regret  that  this  report  has  extended  to  so  great  a  length :  but  it 
will  be  admitted  that  the  subject  is  one  of  the  most  complex  and  intri- 
cate nature,  upon  which  there  maj^  jvistly  be  a  great  diversity  of  judg- 
ment aeording  to  the  different  standpoints  from  which  it  is  viewed.  It 
will  also  be  admitted,  that  so  far  the  problem  has  only  been  dealt  with 
upon  its  surface  indications,  and  a  more  exhaustive  examination  and 
analysis  seemed  justified  by  its  great  importance,  and  the  great  losses 
that  are  incurred  by  a  continued  failure  to  agree  upon  its  final  solution. 

If  I  have  been  able  to  call  attention  to  some  of  the  facts  which  have 
heretofore  received  only  partial  if  any  consideration,  and  if  this  leads 
to  a  fuller  examination  and  to  a  final  settlement  of  this  vexed  question 
upon  a  permanent  basis,  the  object  of  this  report  has  been  fully  at- 
tained ;   and  in  that  case  I  need  not  apologize  for  its  great  length. 

ALBERT  FINK, 

Co')nmissioner, 


POSTSCRIPT. 


The  question  of  marine  insurance  has  not  been  considered  above.  I 
recently  called  upon  Mr.  Frank  Firth,  President  of  the  Erie  and 
Western  Transportation  Company,  for  information  on  this  subject,  and 
he  has  made  some  estimates  and  written  a  report,  in  which  he  gives 
the  following  general  conclusions.  I  have,  however,  had  no  time  to 
examine  into  the  matter. 

First. — The  cost  of  marine  insurance  constitutes  an  important  ele- 
ment in  comparing  the  total  cost  of  movement  by  ocean  from  different 
seaboard  cities. 

Second. — The  differences  in  cost  of  ocean  marine  insurance  by  differ- 
ent classes  of  capacity,  and  for  important  periods,  greatly  exceed  the 
present  differentials  in  rail  rates. 


44 


ATLANTIC    PORT    DIFFERENTIALS 


Third.— A  differential  rate  that  might  overcome  the  increased  ocean 
cost,  due  to  an  inferior  insurance  class  of  ocean  capacity,  and  permit  a 
movement  of  corn  by  a  given  port,  might  not,  owing  to  the  higher  in- 
surance cost  per  100  pounds,  similarly  permit  a  movement  of  wheat. 


Office  of  Commissioner,  New  York,  Dec.  1,  1881. 

STATEMENT  A. 

Sliotving  the  Total  number  of  Bushels  of  Grain  {includinq  Flour)  Beceived  at  and 
Exported  from  the  Four  Atlantic  Ports,  during  the  Years  1878,  1879  and  1880. 
Compiled  from  Produce  Exchange  L'eports. 


RECEIPTS. 

EXPORTS. 

RECEIPTS    IN 
EXCESS  OF 
EXPORTS. 

P^ 

1- 

o 

<»  a 

c  y. 

1-5 

o   . 

S.I 

O    O 

few 

I.— For  Tear  1S78. 
New  York: 
Canal    

63,905,872 

85,350,079 

3,606,219 

23.4 

SI. 3 

l.i 

Rail    

Coast    

1 

Total,    New   York    .    .     .. 

152,862,170 
27,291,781 
45,474,650 
47,075,240 

56.  ( 
10.  C 
16.7 
17.3 

107,819,044 
12,941.359 
29,876,327 
39,724,954 

56.6 
6.8 
15.7 
20.9 

70.5 
47.4 
65.7 
84.4 

45  043  126'     9*>  fi 

Boston    

14,350,422 

15,598,323 

7,350,286 

52  6 

Philadelphia    

Baltimore   

15  6 

Total,   Four  Ports   

272,703,841 

57,044,406 

101,929,243 

4,151,241 

100.0 

18.4 

32.9 

1.3 

190,361,684 

100.0 

69.8 

82,342,157 

30.2 

II.— For  Year  1879. 
New  York: 

Canal    

Rail    

Coast    

! 

Total,   New  York    

163,124,890 
32,798,829 
47,398,455 
66,799,926 

52.6 
10.6 
15.3 
21.5 

124,350,932 
15,774,076 
32,310,473 
55,629,594 

54.5 

6.9 

14.2 

i     21-4 

76.2 
48.1 
68.2 
83.3 

38,773,958 
17,024,753 
15,087,982 
11,170,332 

23.8 
51.9 
31.8 
16.7 

Boston   

Philadelphia    

Baltimore     

Total,   Four  Ports   

310,122,100 

lOO.O 

228,065,075 

100.0 

73.5 

82.057,025 

26.5 

III. -For  Year  1880. 
New  York: 
Canal    

69,440,901 

95,414,882 

4,236,820 

21.9 

30.2 

1.4 

Rail    

Coast    

Total,    New    York    

Boston    

169,092,543 
36,827,476 
49,370,273 
60,642,146 

53.5 
11.7 
15.6 
19.2 

135,204,800 
20,449,864 
31,894,362 
50,957,415 

56.7 

8.5 

13.4 

,    21.4 

80.0 
55.5 
64.6 
84.0 

33,887,743 
16,377,612 
17,475,911 
9,684.731 

20.0 

Philadelphia    

44.5 

Baltimore     

16.0 

Total,    Four   Ports    

315,932,438 

100.0 

238,506,441 

1  100.0 

75.5 

77,425,997 

24.5 

FINK:     ADJUSTMENT   OF   SEABOARD   RATES 
Eecapitulation  in  Percentages. 


45 


YEARS. 


PER  CENT. 

OF 
RECEIPTS. 


PER   CENT.    OF   RE- 
CEIPTS   EX- 
PORTED. 


o  ^ 


PER  CENT. 

OP 
EXPORTS. 


PER   CENT.    OP   RE- 
CEIPTS IN  EXCESS 
OF  EXPORTS. 


O  -^ 


ftO 


P 


1878 
1879 
1880 


66.0 

34.0 

70.5 

47.4 

63.3 

36.8 

76.2 

48.1 

65.2 

34.8 

80.0 

55.5 

65.7 

84.4 

63.4 

36.6 

29.5 

52.6 

34.3 

68.2 

83.3 

61.4 

38.6 

23.8 

51.9 

31.8 

64.6 

84.0 

65.2 

34.8 

20.0 

44.5 

35.4 

15.6 
16.7 
16.0 


Statement  shotving  Tonnage  of  8th  Class  FreigM  foriuarded  to  the  four  Atlantic 
Cities  over  the  four  Trunlc  TAnes  durinei  the  year  ending  December  31,  1880 ; 
also  provortion  of  same  exported  on  Through  Bills  of  Lading. 


BOSTON. 

NEW    YORK. 

PHILA. 

BALTIMORE. 

OVER   THE    FOUR   TRUNK 
LINES. 

p 

03 

a 
•M  a 
o  o 

a 
p 

? 
so 

03 

e 
•H  a 
o  o 

a 
o 

Eh 

a 

d 

«H  a 

o  •- 

d 
o 

y 

Id 

c 
»-.  C 

c  — 

111 

593,732 
293,713 
300,019 

50.5 

2,380,7821 

1,117,990 

81,588 

1,086,402 

'"i'.k 

92.7 

1,332,091 

24,776 

1,307,315 

Shipped  cin  Foreign  B.  L 

Shipped  on  Domestic  B.  L 

446,279 
1,934,503 

IS.  7 
81.3 

1.9 
98.1 

STATEMENT  B. 

Sho^cing  the  relative  amount  of  West  and.  East  Bound,  and  Export  Tonnage  (under 
through  bills  of  lading),  of  all  classes,  of  the  Four  Atlantic  Cities,  during  the 
periods  named  below: 

West  Bound  Tonn.\ge. 

Forwarded  from  the  Four  Atlantic  Cities,  including  a  portion  of  New  England,  over 

the  Five  Trunk  Lines. 


Periods  of  Time. 


Total  Tons 

from    four 

Atlantic 

Cities. 


Percentage  of  Each  City  of 
Total  Tonnage. 


New 

York. 


Boston 
&N.E. 


Phila. 


Bait. 


Total. 


I. — For  the  year  of  1878  . 
II.— For  the  year  of  1879  . 
III.— For  the  year  of  1880  . 
IV. — For  the  8  months  end- 
ing Aug.  31,  1881,  . 


1,274,858 
1,534,923 
1,871,480 

1,297,563 


58.1 

16.2 

15.5 

10.2 

54.2 

16.3 

16.1 

13.4 

54.6 

16.5 

16.0 

12.9 

56.3 

18.9 

13.6 

11.2 

100.0 
100.0 
100.0 

100.0 


46 


ATLANTIC   PORT   DIFFERENTIALS 

East  Bound  Tonnage. 

Over  the  Four  Trunk  Lines,  exclusive  of  Live  Stock. 


Total  Tons 

to  four 

Atlantic 

Cities. 

Percentage  op  Each  City 
Total  Tonnage. 

OF 

Periods  of  Time. 

New 
York. 

Boston 

&N.E. 

Phila.     Bait.       Total. 

I.— For  the  year  of  1878, 
II. — For  the  12  months  end- 
ing July  31,   1880. 
III. — For  the  12  months  end 
ing  July  31,  1881,  . 

7,318,000 
8,934,000 
8,973,000 

42.8 
43.2 
44.3 

22.0 
19.. 5 
23.3 

17.6 
18.4 
16.1 

17.9 
18.9 
16.3 

100.0 
100.0 
100.0 

Export  under  Through  Bills  of  Lading. 
Over  the  Four  Trunk  Lines. 


Periods  of  Time. 

Total 
Tonnage. 

Percentage  of  Each  City  of 
Total  Tonnage. 

^ew     Boston 
York. 

1 
Phila.      Bait.  1    Total. 
1 

I. 
II.- 

—August  1,  1879,  to  July 
31,  1880, 

—August  1,  1880,  to  July 
31,  1881,   

1,293,030 
1,329,826 

56.1 
57.1 

29.0 
32.0 

10.9 
7.4 

4.0 
3.5 

100.0 
100.0 

Note. — The  four  Trunk  Lines  when  mentioned  means  the  New  York  Central  and 
Hudson  River,  the  New  York,  Lake  Erie  and  Western,  the  Pennsylvania  and  the 
Baltimore  and  Ohio  Railroads;  when  the  five  Trunk  Lines  are  referred  to,  the 
Grand  Trunk  Railway  of  Canada  is  included. 


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FINK:     ADJUSTMENT  OP   SEABOARD   RATES  49 

STATEMENT  D. 
Total  Eeceipts  and  Exports  of  Flour  and  Grai;^. 
At  the  five  Atlantic  cities,  New  York,  Philadelphia,  Baliimnrc,  Bosfnn  and  Montreal 
during  the  years  named  below;  also,  Percentages  of  each  City  of  Total  Receipts.  ' 

RECEIPTS, 


TOTAL 
RKCEIPTS 
OF  THE 
FIVE    ATLAN- 
TIC   CITIES. 

PERCENTAGES  OF  EACH  CITY  OF  TOTAL  RECEIPTS. 

TEAR. 

NEW  YORK. 

Phila. 

Bait. 

Bost'n 

Canal.     RaiL 

Coast. 

Total 

Montr'al. 

1860    

85,427,151 
93,753,6iO 

97,522,166 
87,112,779 

1 

63.5 

57.5 

61.2 

.55.3 

.57.9 

55.0 

56.2 

56.4 

53.4 

52.8 

55.8 

52.3 

45.8 

50.3 

52.06 

49.06 

49.51 

7.3 
8.6 
7.7 
8.8 
11.7 
12.3 
12.3 
12.7 
14.2 
14.3 
12.8 
15.7 
17.4 
12.5 
15.49 
14.25 
14.43 

11.2 
11.4 
8.6 
13.1 
11.6 
11.7 
11.1 
11.0 
12.1 
11.2 
12.9 
12.2 
16.9 
16.9 

10.4 
14.3 
11.6 
12.5 
11.0 
10.0 
10.5 

9.6 
10.0 
10.3 

9.3 
10.2 
10.9 
11  .^ 

7  6 

1865     

8  2 

1866    . 

10.9 

1867     

10  3 

1868     

106,769.295 
118,268,9*26 
124,461,841 
158,805,433 
170,234,499 
174,525,321 
192,452,3=53 
179,875,321 
209,082,401 
205,420,366 
293,576,061 
332,485,424 
341,349,702 

7  8 

1869    

11.0 

1870    

27.9 

33.1 

29.7 

24.5 

24.6 

21.1 

15.6 

23.5 

21.76 

17.15 

20.33 

25.9 

21.7 

22.4 

27.5 

30.0 

30.1 

28.2 

24.8 

29.07 

30.66 

27.95 

2.4 

1.6 

1.3 

0.8 

1.2 

1.1 

2.0 

2.0 

1.23 

1.25 

1.23 

9  9 

1871     

10  3 

1872     

10.3 

1873    

11.4 

1874     

9.2 

1875    

9.6 

1876    

9.0 

1877    

9.0 

1878    

16.04         9.29 
20.09         9.86 
17.76       10  88 

7.12 

1879    

6  74 

1880    

7.42 

EXPORTS. 


YEAR 

TOTAL    EXP'RTS 

OF  THE   FIVE 

ATLANTIC 

CITIES. 

PERCENTAGES  OF  EACH  CITY   OF  TOTAL   EXP'TS. 

New    York. 

Phila. 

Bait. 

Boston. 

Montreal. 

1873     

87,407,846 
104,994,100 

90,313,244 
125,771,730 
124,582,116 
212,497,231 
249,942,748 
265,383,823 

62.10 
62.94 
£6.12 
44.13 
50.10 
50.74 
49.75 
50.95 

5.50 
6.36 
9.80 
17.50 
10.82 
14.06 
12.93 
12.01 

10.35                2.45 

19.60 

1874     

11.96 
12.63 
19.69 
20.74 
18.69 

3.03 
4.42 
4.80 
4.79 

6.09 

15.71 

1875     

17.03 

1876     

13.88 

1877     

13.55 

1878     

10.42 

1879    

22.26 

6.31 

8.75 

1880    

19.20                7.71 

10.13 

NOTE.— The  above  Statement  was  compiled  from  Annual  Reports  of  the  New  York  Produce 
Exchange,  with  the  exception  of  the  Percentages  of  New  York,  via  Canal,  Rail  and  Coast, 
respectively,  of  the  Total  Receipts  for  the  years  1870  to  1875,  inclusive,  which  were  pr^ 
pared  from  Statement  on  page  198  of  the  Railroad  Gazette  of  April  19,  1878, 


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in  S  10        00  r-l         i-H 


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51 


52 


ATLANTIC    PORT   DIFFERENTIALS 


STATEMENT  F. 

Shoivina  tliP-  Distrihntwn  and  Per  Cent,  of  Total  Tonnafje  to  each  Destination  of 
Traffic  originating  at  the  Four  Atlantic  Cities  and  Eleven  Interior  New  Eng- 
land Competing  Points,  carried  to  the  West  by  the  Four  Trunk  Roads  {the 
N.  T.  Central,  N.  Y.,  L.  E.  4"  Western,  Pennsylvania  cf  Bait.  <|'  Ohio).  Also  in- 
cluding Traffic  carried  iy  Central  Vermont  and  Grand  Trunk  from  JBoston  and 
New  England  Competing  Points. 

During  the  Year  Exding  December  31,  188U. 

NOTP-.— The  New  England  Competing  Points,  the  Tonnage  of  which  is  embraced  in  this  State- 
ment, are  Lowell,  Nashua,  Worcester,  Springfield,  Providence,  South  Framingham,  Nor- 
thampton, Holyoke,  Westfleld,  Salem,   and  Fitehburg. 


DESTINATIONS. 


Tonnage.  iPerCent. 


Chicago    

Peoria    

St.  Louis   

Indianapolis   

Cincinnati    

Louisville  

Total    

Milwaukee   

Cleveland     

Detroit    

Toledo   

Total    

Mississippi  River  Points  

Missouri  River  Points   

Bloomington    

Springfield     

Cairo    

Evansville    

Port   Wayne    

Lafayette 

Terre    Haute    

Columbus    

Dayton    

Sandusky     

Total    

Buffalo    , 

Pittsburgh    

Wheeling    

Parkersburg  

Total    

Wisconsin  and  North  West   . 

Iowa     

Illinois    

Missouri    

Ark.,  Tex.,  La.  and  Ind.  Ty. 

California    

Michigan    

Western  Canada   

New  York  State  

Pennsylvania     

Ohio    

Indiana    

South  of  Ohio  River  

West   Virginia    

Total    

Grand  Total  


346,582 

18.52 

11,012 

0.59 

115,77tj 

6.18 

30,955 

1.65 

118,768 

6.35 

37,069 

1.98 

660,162 

35.27 

45,299 

2.42 

82, -288 

4.40 

74,955 

4.01 

30,374 

1.62 

232,916 

12.45 

16,927 

0.91 

37,629 

2.01 

3,739 

0.20 

8,048 

0.43 

929 

0.05 

9,104 

0.49 

8,865 

0.47 

5,730 

0.31 

8,012 

0.43 

22,707 

1.21 

14,845 

0.79 

5,853 

0.31 

142,388 

7.61 

57,587 

3.08 

260,722 

13.93 

22,576 

1.21 

4,592 

0.24 

345,477 

18.46 

83,149 

4.44 

29,045 

1.55 

28,324 

1.51 

4,511 

0.24 

7,681 

0.41 

48,369 

2.59 

41,552 

2.22 

25,383 

1.36 

8,884 

0.47 

31,453 

1.68 

128,954 

6.89 

26,006 

1.39 

25,979 

1.39 

1,247 

0.07 

490,537 

26.21 

1,871,480 

100.00 

FINK:     ADJUSTMENT   OF   SEABOARD   RATES 


53 


Statement  shotving  the  Percentages  of  Tonnage  Destined  to  the  several  States, 
classified  according  to  their  Destination  in  States. 


DISTRIBUTION  BY  STATES. 


Tonnage.    Per  Cent 


Wisconsin    

Iowa     

Missonri    

Ark.,  Tex.,  La.  and  Ind.  Ty. 

Illinois    

Indiana     

Michigan    

Ohio    

South  of  Ohio  River   

Pennsylvania     

West    Virginia    

New  York   State   

Western  Canada    

California    


Total    1,871,480 


128,448 

6.86 

39,613 

2.12 

164,275 

8.78 

7,681 

0.41 

398,634 

21.31) 

88,672 

4.74 

116,507 

6.22 

406,789 

21.57 

63,048 

3.37 

292,175 

15.61 

28,415 

1.52 

66,471 

3.55 

25,383 

1.30 

48,369 

2.59 

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7)Q  ATLANTIC    PORT   DIFFERENTIALS 

STATEMENT  H. 

I, — Quotations  of  Bates  on  Grain  via  LaTce  and  Canal  and  Lake  and  Bail,  from  Chi- 
cago to  New  York,  during  the  year  1880,  as  per  report  of  Board  of  Trade 
of  Chicago. 

II. — Average  Ocean  Rates  at  New  York  and  Baltimore,  for  each  of  the  11  months 
ending  November  30,  1881. 

III. — Estimate  of  Average  Ocean  Bates  on  Grain  exported  by  Steam  and  Sail,  from 
New  York  and  Baltimore,  from  January  1  to  November  30,  1881. 


RATES  ON  GRAIN  VIA  LAKE  AND  CANAL 

AND  LAKE  AND   RAIL. 
NOTE.— The   estimate   for  insurance— 0.6   cents 
per  100  lbs.— is  based  upon   the  charges  of 
1881   apphed   to    the   value  of  grain   trans- 
ported during  1880. 


DATE. 


LAKE 

AND    CANAL 

RATES. 

a 
K 

^-^ 

.9    ^ 

m 

2° 

^•§1 

a 

o 

O  be 

B  a 

S 

CK 

P513 
q 

5Ss 

4,5 
^  03 

a 

J3  «  « 

li 

h-l 

o 

O 

►-? 

Cts.per 

cts.per 

Cts.per 

Cts.per 

100  lbs. 

100  lbs. 

100  lbs. 

100  lbs. 

April 


May 


9.9 
8.2 
6.3 
5.2 


July 

August 

September 

October 

November 

Average  rate 
Lake    Ins.     ... 
Av'ge    +    Ins. 


15 

7.7 

22 

9.0 

29 

10.2 

^ 

10.8 

12 

13.2 

19 

12.3 

26 

11.5 

3 

10.0 

10 

9.5 

17 

7.6 

34 

7.2 

31 

8.0 

7 

9.8 

14 

10.1 

21 

9.1 

28 

8.7 

4 

7.8 

11 

7.1 

18 

6.9 

2.5 

6.8 

2 

7.5 

9 

9.9 

16 

11.9 

23 

12.5 

30 

12.2 

6 

12.8 

13 

12.1 

20 

10.9 

27 

11.2 

12.5 

12.5 

11.6 

9.8 

9.6 

10.2 

10.1 

9.9 

10.5 

11.2 

11.7 

11.9 

11.5 

10.8 

9.5 

9.1 

9.7 

9.2 

9.4 

9.8 

10.5 

9.7 

9.6 

9.6 

9.7 

10.1 

10.4 

10.1 

11.1 

13.1 

14.3 

13.9 

13.0 


23.7 
22.0 
19.3 
16.3 
17.5 
19.2 
20.5 
21.4 
22.6 
25.7 
25.4 
24.7 
22.8 
21.5 
18.4 
17.6 
18.9 
20.3 
20.8 
20.2 
20.5 
18.5 
18.4 
18.2 
18.2 
19.3 
22.0 
23.8 
25.4 
27.1 
28.8 
27.7 
25.8 


28.6 
28.6 
28.2 
27.5 
26.7 
25.1 
27.3 
27.3 
27.5 
26.7 
27.2 
26.7 
26.7 
24.8 
24.8 
23.9 
25.0 
26.3 
25.0 
23.0 
25.5 
22.5 
22.7 
22.5 
22.0 
23.0 
257^ 
26.7 
26.7 
26.7 
26.5 
28.0 
29.5 


25.9 


AVERAGE  OCEAN  RATES  AT  NEW  YORK 

AND  BALTIMORE. 

For  each   of  the  11   months  ending   November 

30,    1881. 


STEAM,  TO 

LIVERPOOL. 

^ 

o 

o 

r-i 

5 

ji 

^ 

!z; 

" 

Per 

Per 

Bushel. 

Bushel. 

SAIL,  TO 

CORK    FOR 

ORDERS. 


Per        Per 

Quar'r.  Quar'r. 


January 
February 
March    ... 

April     

May    

■lune     

July    

August  . . 
September 
October  . 
November 


Average  for  11 
months  end- 
ing Nov.  30, 
'81,  in  s.  and 
d 


In      cents      per 
lOO    lbs.    ... 


d 

7     + 
51/2— 
5    — 
41/8 
2V2 

3l^- 

4%- 
5  + 
SVs-h 
3 


41/3 


d. 

71/3  + 
6,^ 


s.    d. 

4  51/2  )- 

4  n  + 


6Vi-    4  6     + 


5% 

SV2- 
4  -f 
5%- 
4  — 
3% 

5y« 


4  6% 
4  4% 
4  4% 

4  7% 

5  1     + 
4  8 

4  5 
4  6V2 


S.     (1 
5  6-1- 
4  11  + 
4  5    — 
4  S% 
3  9     + 

3  9     + 

4  3  -t- 
4  8  + 
4  3 

4  OV3 
4  9     + 


4  7Va 


23.0 


4  5%+ 


22.3 


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58 


ATLANTIC    PORT   DIFFERENTIALS 
STATEMENT  J. 


Destination  of  Export  Corn  and  Wheat  front  New  York  and  Baltimore  during  Crop  year 
ending  August  31,  1880,  and  from  Philadelphia  during  Calendar  Year  ending  De- 
cember 31,  1880. 


DESTINATIONS. 

New  York— Bushels. 

6 
o 

"a 
o 

«  o 

^    O 

gB.a 

4)  » 

n 
1 

.5 
2 
ft 

-c 

03 

3 

"3 
o 

II 

2-S 

O  03 

H    ^ 
_    O 
03""^ 

u 

■w  5^  OS 

Baltimore— Bushels. 

s 

o 

o 

H 

o  ^ 

1- 

2S 

_    C 

C8  '^ 

«£  a 

as  c 

(1)  «. 

Great  Britain: 
London   

9,234,783 

11,278,805 

4,485,581 

4,255,559 

3,091,014 

389,982 

448,931 

242,740 

19,727,255 

799,238 

374,193 

10,175,351 

8.1 
9.9 
3.9 
3.8 
2.7 
0.3 
0.4 
0.2 
17.4 
0.7 
0.3 
9.0 

806,394 

3,456,210 

95,915 

619,582 

513,323 

1,586,576 

1,344,029 

405,285 

9,29<^),455 

701,140 

208,6  8 

7,695,917 

1.5 

6.5 
0.1 
1.1 
1.0 
3.0 
2.5 
0.8 

17.4 
1.3 
0.4 

14.4 

Liverpool   

Glasgow    

Hull  

Bristol   

Dublin    

Belfast  

Gloucester    

Cork  and  Queenstown   

1   ■  ■  ■ 

New  Castle  



Cardiff    

Other  British  ports  

64,503,462 

7,756,377 
4,723,139 
1,611,484 
2,861,890 
164,340 
9-25,902 

56.7 

6.9 
4.2 
1.4 
2.5 
0.2 
0.8 

60.8 

5«.l 

5.0 
1.0 

G'.r.,  Dutch  and  Belgian  Ports: 
Antwerp    

2,668,449 
541  532 

Hanilnirg   

1 

Bremen    

646  716 

Rotterdam    

964826       1  »' 

Amsterdam   

Other  German  ports   

45,295 

0.1 

Total  Ger.,  Dutch  &  Belg.  pts. 
Denmark    

18,043,132 

2,830,798 

731,528 

4,241,523 

1,577,841 

64,202 

1,273,631 

1,332,509 

1,030,791 

680,181 

596,475 

1,494,714 

16.0 
2.5 
0.6 

3.7 
1.4 
0.1 
1.2 
1.2 
0.8 
0.6 
0.5 
1.3 

65. o!  4,812,248      15.8 
80.3       46,-, 216       1.5 

87  2'      if>7  4J0l      n  4 

17.4 
13.3 
12.8 

4,886,818 
227,822 

9.2 
0.4 

17.6 
6.4 

Sweden  and  Norway   

France: 
Havre    

1 

1,716,647 
28,200 
625,910 
1,734,738 
3,318,614 
1,039,191 
2,653,916 
4,517,723 
3,854,706 

3.2 
0.1 
1.2 
3.2 
6.2 

Marseilles   

1 

Bayonne   

Dimkirk  

Rouen  

Calais    

1.91 

St.  Nazaire  

5.0' 

Bordeaux  

8.5 
7.2 

Other  French  ports   

Total  French  ports  

12,291,867 

960,811 
lt>8,457 
100,338 

10.8 

0.8 
0.2 
0.1 

32.1 

6,484,104 

21.4 

16.9 

19,489,645 

24,585 
128,619 

36.5 

0.1 
0.2 

51.0 

Lisbon   

Other  Portuguese  ports   

Total  Portuguese  ports   

Vigo    

1,259,606 

10,056 
290,945 
366,32.5 

30,262 
1,475,54C 

1.1 

0.0 
0.2 
0.3 
0.1 
1.3 

36.6 

2,026,939 

6.7 

58.9 

153,204 

0.3 

4.5 

Barcelona    

Gibraltar    

Cadiz   

1 

Other  Spanish  ports 

1 

Total  Spanish  ports  

Italy: 
Genoa    

2,173,128 

28,20f 
1,108,524 
1,721,78' 

1.9 

O.C 
l.C 
l.E 

53.0 

1,072,48€ 

3.5 

26.2 

851,505 

1.6 

20.8 

Naples    

733,936 
91,545 

1.4 
0.1 

Other  Italian  ports    

1 

\ 

Total  Italian  ports  

2,858,51S 

>       2.E 

68.7 

478. 38C 

1.6 

11.5 

825.481 

1.5 

19.8 

FINK:     ADJUSTMENT   OF    SEABOARD   RATES 
STATEMENT  J— Continued. 


59 


DESTINATIONS. 

3 

n 
1 

o 

t 

a 

o 
o 

5  " 
2  « 
*3  ** 

_  0 
_p  £ 

^5  . 

°  0  0 
.  c  *- 

■lj,G    CO 

^£ 

s 

n 
1 

6 
0 

1- 

0 
ft 

CO 

|s 

^  0 
"3*^ 

0  s 

fell 

"3 

n 

0 
£ 

B 

2 

0 

°£ 

03 

P4 

B-g 

_  0 

p  £ 
■ex:  « 

All  Other  Forts: 
Geneva    

83,660 

7,574,351 

700 

62,746 

252,560 

622,609 

3.639 

18,197 

377,200 

0.1 

6.7 

1       1 

Other  Continental  ports  

49,698 

0.2 



Brazil  

0.0 

10,000 

0.0 

Argentine  Republic  

0.1 
0.2 
0.5 
0.0 
0.0 
0.3 

Other  South  American  ports   

West   Indies    

71 
64,769 

0.0 22,183 

0.2 ,        24,321 

0.0 
0.1 

Central   America    

British  North  American  Colonies 

7,735 
142,141 

0.0 
0.3 

Other   Countries    ■. 

8,995,662 

7.9 

96.6 

114,538 

0.4 

1.2 

206,380 

0.4 

2.2 

Total  export,  corn  and  wheat 

113,687,702    100.0      57.6 

30,347,274 

100.0     15. 453, 373, 359 

1            i 

100.0 

27.0 

NOTE.— The  New  York  statiiiient  was  compiled  from  New  York  Produce  Exchange  Report  for  1880, 
pages  352  and  353;  the  Philadelphia  statement  from  the  Forty-eighth  Annual  Report  of  the  Philadel- 
phia Board  of  Trade,  pages  75  to  95  inclusive;  and  the  Baltimore  statement  from  the  Report  of  the 
Baltimore  Corn  and  Flour  Exchange  for  1S80,  pages  93  and  94,  and  111  to  113  inclusive. 


STATEMENT  K. 

Estimate  of  Average  Ocean  Bates  on  Grain  Exported  by  Steam  and  Sail  from  New  York, 
Philadelphia  and  Baltimore,  during  the  year,  and  during  the  periods  of  Open  and 
Closed  Navigation  of  the  Year  1880. 


DURING  THE  YEAR. 


NEW    YORK. 

PHILADELPHIA. 

BALTIMORE. 

Bushels. 

a 
O 

in  «  fe 

Bushels. 

a 

Bushels. 

a 
O 

§5  . 

48,893,855' 
61,a06,96! 

44.4 
55.6 

19.7 
25.3 

7,390,000 
22.067,000 

25.1 
74.9 

21.4 
24.6 

12,804,529 
28,383,410 

31.1 
68.9 

22.3 

25.8 

Total    

110,160,821 

100.0 

29,457,000100.0 

41,187,939 

100.0 

22.81 

23.79 

24.71 

Ave.  Rate  higher  than  from  N.  T. 

0.98 

1.90 



DURING   OPEN   NAVIGATION. 


NEW    YORK 

PHILADELPHIA. 

BALTIMORE. 

Tons. 

a 
6 

fc  «  fe 
< 

Tons. 

g 
O 

UKa 

Tons. 

a 

93  4-1 

!r,  "  aS 
< 

1,302,369 

1,630,895 

44.4 
15.6 

23.0 

2r.7 

143,857 
429,279 

25.1 
74.9 

22.5 
27.0 

265,5951  31.1 
588,407;  68.9 

25.7 

27.8 

Total    

2,933,264 

100.0 

573,136 

100.0 

854,0O2ilftft-O 

25.61 

25.87 

27.15 

Ave.  Rate  higher  than  from  N.  Y. 

0.26 

1.54 

DURING  CLOSED  NAVIGATION. 


NEW   YORK. 

PHILADELPHIA. 

BALTIMORE. 

Tons. 

1 

g|    . 

IB  jS  . 

!r,  «  fe 
< 

Tons. 

a 

to 

«•- o 

CO  4-^    . 

Tons. 

a 
S 

CO 

n  S    • 

°«; 

0)— § 

!n  «  fc 
<1 

245,000 
306,802 

44.4 
55.6 

16.4 
22.9 

37,421 
111,665 

25.1 
74.9 

20.3 
22.2 

82,401 
182,553 

31.1 

68.9 

19.0 
23.8 

Sailing  Vessels    

Total    

551,802 

100.0 

149,086 

lOO.O 

264.954 

100.0 

Average  Rate   

20.01 

21.72 

22  31 

Ave.  Rate  higher  than  from  N.  Y. 

1.71 

2.30 

60 


FINK:     ADJUSTMENT   OF   SEABOARD   RATES  61 

NOTE  1.— The  rates  during  the  year  are  on  the  basis  of  Steam  to  Liverpool,  and  Sail  to  Cork  for 
orders,  for  entire  year  of  1880:  the  rates  during  open  navigation  are  taken  from  the  last  six  months 
of  1880,   and  the  rates  during  closed  navigation  for  first  six  months  of  1880.    See  Statement  "G." 

NOTE  2.— The  Statement  for  the  year  shows  the  quantities  of  Corn  and  Wheat  exported  by  Steam 
and  Sail  from  New  York,  as  per  N.  Y.  Produce  Exchange  Annual  Report  for  1880.  page  3il;  from 
Philadelphia  for  the  year  ending  December  31,  1880,  as  furnished  hy  Messrs.  Peter  Wright  &  Sons;  and 
from  Baltimore  for  the  Crop  year  ending  August  31,  1881,  compiled  from  the  Paltimorc  Journal  of 
Commerce  of  September  3,   1881. 

NOTE  3.— Estimate  of  P^xports  of  Grain  during  seasons  of  Open  and  Closed  Navigation,  are 
based  upon  the  receipts  of  grain  at  New  York,  Philadelphia  and  Baltimore  during  the  respective 
periods,  assuming  that  the  percentages  of  receipts  exported  during  each  period  were  the  same  as  for 
the  entire  year,  viz:  New  York,  80  per  cent.,  Philadelphia,  64.6  per  cent.,  HaltiuKjre,  84  per  cent. 
The  amounts  estimated  as  exported  by  steam  and  by  sail  during  each  period,  were  assumed  to  be  in 
the  same  proportion  as  the  exports  during  the  whole  year. 


62 


ATLANTIC    PORT   DIFFERENTIALS 
STATEMENT  L. 


Estimate  of  Average  Bate  per  100  lbs.  for  Transporting  Grain  to  and  through  New 
York,  Fhiladelphia  and  Baltimore,  by  all  Routes,  during  the  year  1880.  Also, 
during  Open  Navigation  of  same  year. 


Lake  iind   Canal 
Lake  and   Rail 
Rail— Through 


NEW   YORK. 


Totals— Tonnage  and  Estimated  Revenue 

Average  Inland  Rate   

Average  Ocean  Rate  


Lake  and   Rail 
Rail— Through 


Average  Through  Rate 
PHILADELPHIA. 


Totals— Tonnage  and  Estimated  Revenue 

Average  Inland  Rate   

Average  Ocean  Rate  


Average  Through  Rate 


Lake  and   Rail 
Rail— Through 


BALTIMORE. 


Totals— Tonnage  and  Estimated  Revenue 

Average  Inland  Rate   

Average  Ocean  Rate  


Average  Through  Rate 


DURING  THE  TEAR  1880. 


IDURING    OPEN    NAVIGA- 
TION,   1880. 


■n 

s 

0) 

o 

•^ 

rf) 

^ 

a 

^^ 

S) 

a 

g 

u 

03 

> 

« 

P. 

< 

3 


?. 

a 

o 

m 

1 

x: 

a 

a 

s 

bl 

il- 

a 

ea 

a3 

> 

ta 

a 

< 

3 


1,975,552 

712,257 

1,668,525 


4,356,334 


171,377 
946,613 


1,117,990 


1,332,091 


RECAPITULATION. 


Average  Inland  Rate   

Less  or  more  to  N.  Y.,  allowing  Differentials 
Less  to  New  York  without  Differentials  ... 

Average  Ocean  Rate  

Less  from  New  York  

Average  Through  (Inland  and  Ocean)  Rate 
Less  via  New  York,  allowing  Differentials  ., 
Less  via  New  York,  without  Differentials  . 


DURING  THE   YEAR  1880. 


N.  T. 


Phila. 


Bait. 


DURING  OPEN  NAVIGA- 
TION,   1880. 


N.  T. 


Phila. 


Bait. 


25.69  cts. 


22.81  Cts. 


48.50  cts. 


27.27  cts. 
1..5S  " 
3.58  " 

23.79  " 
0.98  " 

51.06  " 
2.56  " 
4.56  " 


26.43  cts. 

—0.74  " 

3.74  " 

24.71  " 

1.90  " 

51.14  " 

2.64  " 

5.64  " 


25.61  Cts. 


49.82  cts. 


23.07  cts. 
—0.86  " 

2.86  " 
25.87  " 

0.26  " 
50.94  " 

1.12  " 

3.12  " 


24.14  cts. 
-f0.07  " 

2.93  " 

27.15  " 
1.54  " 

5159  " 

1.47  " 

4.47  " 


FINK:     ADJUSTMENT   OF   SEABOARD   RATES  63 

NOTE  I.— The  average  Rail  rate  during  the  year  1S80,  according  to  tariff,  was  32.5  cents  per  100 
lbs.,  Chicago  to  New  York,  but  as  this  rate  w'as  not  always  fully  maintained,  .30  cents  has  been 
estimated  as  the  average  rate  during  the  whole  year.  During  open  navigation  tlie  tariff  rate  was  30 
cents,  but  for  same  reasons  has  been  estimated  at   27. .i  cents. 

NOTE  II. — The  average  Lake  and  Rail  rate,  as  reported  by  the  Ohicago  Board  of  Trade,  was 
25.9  cents;  on  account  of  probable  reductions  in  rail  proportion,  it  has  been  assumed  1.2.")  cents  less, 
making  it  24.65  cents  +  0.6  cents  insurance,  —  25.25  cents.  The  rates  on  grain  from  Buffalo  were 
probably  less,  on  account  of  reduced  rail  rates,  but  have  been  estimated  the  same  as  lake  (steam) 
and  rail.  The  grain  shipments  originating  at  Buffalo,  were  479,505  tons  to  New  York,  and  18,646 
tons  to  Philadelphia. 

NOTE  III. — No  estimate  has  been  made  of  the  average  rate  to  Boston,  as  the  reports  of  rail  re- 
ceipts at  Boston  do  not  include  the  receipts  via  the  Grand  Trunk  Railway,  and  are  therefore  incom- 
plete. 

NOTE  IV.— The  estimate  of  average  rates  is  based  upon  grain  carried  to  seaboard  by  the  Trunk 
Lines  from  their  Western  termini  and  beyond. 

In  the  Produce  Exchange  reports  of  total  receipts  at  seaboard  cities,  there  is  included  grain  from 
points  East  of  Western  termini  of  the  Trunk  Lines,  as  well  as  grain  from  other  transportation 
routes. 

A  comparison  of  Trunk  Line  and  Produce  Exchange  Statements  will  show  that  New  York  re- 
ceived from  these  sources  290,450  tons,  or  about  10,(;K)0,(WXI  bushels;  Philadelphia,  217,350  tons,  or 
about   7,000,000  bushels;     Baltimore,    388,921   tons,   or  about  12,000,000  bushels. 

Expressed  in  percentages  of  the  whole  receipts,  this  grain,  for  the  transportation  of  which  the 
Tnmk  Lines  do  not  compete,  amounts  at  New  York  to  6.4  per  cent.;  at  Philadelphia  to  16.3  per 
cent.,   and  at  Baltimore  to  22.6  per  cent  of  the  whole  receipts. 


PREAMBLE  AND  RESOLUTIONS 

APPOINTING 

ADVISORY  COMMISSION. 

1882. 


65 


PROCEEDINGS  OF  MEETING  OF  THE  TRUNK  LINE  EXECU- 
TIVE COMMITTEE,  HELD  AT  THE  OFFICE  OF  THE  COM- 
MISSIONER, JANUARY  24,  1882,  AT  11 :  30  A.  M. 

APPOINTMENT  OF  AN  ADVISORY  COMMISSION. 

The  following  Preamble  and  Resolutions  were  unanimously  adopted : 

Whereas,  The  New  York  Central  and  Hudson  River  Railroad  Com- 
pany, W.  H.  Vanderbilt,  President;  the  New  York,  Lake  Erie  and 
Western  Railroad  Company,  H.  J.  Jewett,  President;  the  Pennsyl- 
vania Railroad  Company,  G.  B.  Roberts,  President;  and  the  Baltimore 
and  Ohio  Railroad  Company,  John  W.  Garrett,  President,  have  agreed 
that  the  differences  in  rates  which  should  exist  both  Eastwardly  and 
Westwardly,  and  upon  all  classes  of  freight,  between  the  several  termi- 
nal Atlantic  ports,  be  submitted  to  a  Commission  consisting  of  three 
competent  and  disinterested  persons,  before  whom  the  Chambers  of 
Commerce  or  other  authorized  and  interested  Trade  bodies  of  the  sea- 
board cities  involved  may,  by  duly  accredited  representative's,  present 
and  argue  the  bearing  of  such  differences  in  rates  upon  their  several 
cities  and  interests ;  said  Commission  to  procure  such  other  information 
as  it  may  desire,  and  report  their  conclusions  to  the  said  Railway  Com- 
panies.   Therefore,  it  is 

Resolved,  That  the  Commissioner  of  the  Trunk  Lines  is  herebj^  di- 
rected to  notify  the  gentlemen,  who  may  be  selected  as  members  of  the 
Commission,  of  their  appointment,  and  solicit  their  acceptance,  and 
also  to  furnish  them  with  a  copy  of  this  preamble  and  resolutions,  and 
after  the  Commission  is  formed,  to  give  notification  to  the  various  com- 
mercial organizations  of  the  several  Atlantic  cities,  and  to  request 
them  to  appoint  committees  or  representatives,  for  the  purpose  of  meet- 
ing the  Advisory  Commission,  at  such  times  and  places  as  may  be 
mutually  agreed  upon,  to  carry  out  the  object  of  the  foregoing  agree- 
ment. 

Resolved,  That  Hon.  Allen  G.  Thurman,  Hon.  E.  B.  Washburne, 
Hon.  Thos.  ]\I.  Cooley,  constitute  the  Commission. 
C.  W.  BuLLEN,  Albert  Fink, 

Secretary.  Commissioner  of  Trunk  TAnes. 


67 


Report  op 

Messrs.  Thurman,  Washburne  &  Cooley 

Constituting  an 

Advisory  Commission  on 

Differential  Rates  by  Railroads 

Between  the  West  and 

THE  Seaboard. 


fi9 


REPORT  UPON  DIFFERENTIAL  RATES. 

PRELIMINARY. 

In  January,  5882,  the  undersigned  were  notified  that  they  liad  been 
selected  by  the  New  York  Central  and  Hudson  River  Railroad  Company, 
W.  H,  Vanderbilt,  President ;  the  New  York,  Lake  Erie  and  Western 
Railroad  Company,  H.  J.  Jewett,  President ;  the  Pennsylvania  Rail- 
road Company,  G.  B.  Roberts,  President,  and  the  Baltimore  and  Ohio 
Railroad  Company,  John  W.  Garrett,  President,  to  act  as  an  Advisory 
Commission  upon  ' '  the  differences  in  rates  that  should  exist,  both  East- 
wardly  and  Westwardly,  upon  all  classes  of  freights  between  the  several 
terminal  Atlantic  ports, ' '  and  to  report  upon  the  same. 

Accepting  the  appointment,  the  undersigned  met  and  organized  as  a 
Commission,  at  the  City  of  New  York,  on  February  13,  1882,  by  desig- 
nating ]\Ir.  Thurman  to  act  as  Chairman  and  selecting  Mr.  Thomas  C. 
Moore,  of  Indianapolis,  as  Secretary.  On  conferring  with  Mr.  Albert 
Fink,  who  on  that  occasion  represented  the  several  railroads  named, 
we  were  informed  that  it  was  not  the  purpose  or  desire  of  the  railroad 
managers  to  take  part  in  the  proposed  inquiry  after  setting  it  on  foot ; 
but  that  they  proposed  to  leave  it  exclusively  in  our  hands,  in  the  ex- 
pectation, however,  that  other  parties  interested  in  the  problems  of 
railroad  transportation  would  make  before  us  a  full  showing  of  the 
facts  supposed  to  have  a  bearing  upon  the  question,  and  that  we  would 
then  express  our  opinion,  unintluenced  by  the  wishes  or  interests  of 
the  railroad  companies.  The  managers  informed  us,  however,  that 
they  held  themselves  ready  to  furnish  any  such  information  as  might 
be  peculiarly  within  their  knowledge,  at  any  time  when  we  might  call 
for  it. 

Having  this  understanding  of  our  commission,  and  desirous  of 
acting  intelligently  and  with  full  information,  we  caused  circulars 
to  be  sent  to  all  the  commercial  organizations  of  the  cities  of  New 
York,  Philadelphia,  Baltimore  and  Boston,  and  to  such  like  organiza- 
tions in  the  interior  as  it  was  thought  would  be  inclined  to  respond, 
inviting  them  to  appear  before  the  Commission  and  present  their 
views;  and  whenever  a  desire  to  be  heard  was  expressed  by  any  one 
of  them,  time  and  place  were  designated  for  the  purpose. 

From  the  Produce  Exchange,  the  Board  of  Trade  and  Transporta- 
tion and  the  Chamber  of  Commerce  of  the  City  of  New  York,  and  from 
the   corresponding   organizations   of  the   cities   of  Philadelphia   and 

71 


72  ATLANTIC    PORT   DIFFERENTIALS 

Baltimore,  letters  expressive  of  a  desire  to  be  heard  were  received,  and 
public  meetings  were  accordingly  held  in  those  cities,  at  which  the 
question  referred  to  us  was  very  fully  considered  and  discussed.  For 
the  purposes  of  such  discussion,  we  found  that  in  every  instance  careful 
and  thoughtful  preparation  had  been  made,  and  the  arguments,  either 
in  full  or  in  substance,  were  put  in  print  for  our  subse(|uent  review. 
Statistics  were  also  collected  for  us,  so  far  as  was  thought  important. 
Under  the  guidance  of  the  commercial  bodies,  we  also  visited  and  in- 
spected the  railroad  terminal  facilities,  under  circumstances  most  favor- 
able to  a  full  understanding  of  the  manner  in  which  they  concerned  the 
general  subject. 

The  leading  commercial  organizations  of  St.  Louis,  Louisville  and 
Toledo  also  appeared  before  us  at  public  sittings  held  in  those  cities 
respectively,  and  presented  their  views  in  print,  supplementing  them 
with  oral  arguments  and  explanations. 

We  were  also  favored  at  Philadelphia  with  discussions  by  representa- 
tives of  the  Board  of  Trade  of  Newark,  New  Jersey,  and  at  St.  Louis 
with  the  views  of  the  Board  of  Trade  of  Indianapolis,  presented  by  one 
of  its  members.  The  Chamber  of  Commerce  of  Cincinnati  communi- 
cated its  views  to  us  in  formal  resolutions,  without  deeming  it  neces- 
sary to  request  public  sittings  in  that  city,  and  single  individuals,  not 
representing  any  formal  organizations,  have  also  in  some  cases  been 
heard.  We  have  also  sought  and  obtained  information  independently 
wherever  we  have  found  it  available,  and  have  made  use  of  the  pub- 
lished reports  of  the  railroad  companies  for  that  purpose.  Our  en- 
deavor has  been  to  view  the  subject  from  the  standpoints  of  the  various 
interests  concerned,  and  to  reach  a  conclusion  that  overlooked  the  just 
claims  of  no  interest  and  no  locality. 

THE   QUESTION. 

The  subject  referred  to  us  is  that  commonly  spoken  of  under  the 
designation  of  Differential  Rates.  In  the  reference,  however,  and  in 
the  paper  which  follows,  the  term  is  made  use  of  in  a  somewhat  re- 
stricted sense,  being  applied  not  to  the  differences  in  rates  generally, 
or  as  between  the  several  classes  of  freight  as  they  are  arranged  in  the 
tariffs  of  freight  charges,  but  to  the  differences  in  rates  which  are  made 
by  the  railroad  companies  as  between  the  several  Atlantic  seaport  cities, 
and  the  interior  points  where  the  freights  are  taken  up  or  delivered. 
It  appears  that  the  four  railroad  companies  mentioned,  and  which, 
with  the  Grand  Trunk  of  Canada,  are  commonly  called  the  Trunk  Line 
roads,  have  generally  been  accustomed  to  make  higher  charges  for  the 
transportation  of  freights  between  New  York  and  Boston,  as  eastern 


REPORT   UPON    DIFFERENTIAL    RATES  73 

termini,  and  the  leading  towns  of  the  interior,  than  between  Phila- 
delphia and  Baltimore  and  the  like  towns;  and  that  at  the  present 
time  they  seem  to  agree  in  the  policy  and  propriety  of  making  these 
differences.  An  idea  of  the  extent  of  the  differences  is  indicated  by  the 
statement  that,  taking  the  charges  for  the  transportation  of  eastward 
bound  freights  from  Chicago  to  New  York  as  the  standard,  the  charges 
to  Boston  are  made  the  same,  and  those  to  Philadelphia  two  cents,  and 
to  Baltimore  three  cents  per  hundred  pounds  less.  On  westward  bound 
freights  the  differences  are  not  uniform,  but  are  made  higher  in  the  case 
of  those  classes  of  property  which  are  rated  highest  in  the  freight 
tariffs.  As  between  the  seaboard  cities  and  St.  Louis,  Cincinnati,  To- 
ledo and  other  Western  towns,  the  rates  are  proportioned  to  the  Chi- 
cago rate  according  to  mileage.    This  is  the  existing  rule  or  practice. 

Whether  it  is  right  or  proper  to  make  any  such  discrimination  in  the 
charges  for  the  transportation  of  property  between  the  Atlantic  cities 
and  the  cities  of  the  interior,  and  if  so,  to  what  extent,  is  the  question 
that  we  understand  was  referred  to  us,  and  nothing  more.  We, 
therefore,  limit  our  discussion  to  that  question,  and  pass  by  many  sub- 
jects of  interest  in  railroad  transportation  that  were  more  or  less 
touched  upon  in  the  public  discussions  which  took  place  in  our  hearing, 
but  which  can  interest  us  only  as  private  citizens.  Whatever  opinions 
we  or  any  of  us  maj^  have  respecting  controverted  questions  in  railroad 
policy  and  railroad  management,  which  do  not  fall  within  the  scope 
of  our  present  inquiry,  it  would  not  become  us  to  intrude  them  into 
this  discussion. 

THE  PARTIES  CONCERNED. 

Although  the  invitation  to  us  came  from  the  Trunk  Line  railroad 
companies,  we  have  not  understood  that  this  was  because  the  subject 
was  one  over  which  they  had  rightfully  any  exclusive  authority.  It  is, 
indeed,  a  subject  with  which  they,  first  of  all,  are  called  upon  to  deal, 
for  they  and  their  affiliated  roads  enforce  the  charges  which  come  under 
consideration,  and  establish  the  differentials  if  any  are  established  at 
all.  But  the  railroads  constitute  a  single  class  only  of  the  many  whose 
interests  may  be  affected,  and  it  may  appear,  perhaps,  that  they  are 
not  the  class  most  largely  concerned.  In  all  the  discussions  before  us 
it  has  been  assumed  that  the  people  of  Boston,  New  York,  Philadelphia 
and  Baltimore,  and  especially  all  those  who  are  engaged  in  the  exchange 
of  commodities  with  the  interior  and  with  foreign  countries,  are  largely 
interested,  and  that  their  prosperity  is  to  some  extent  involved  in  the 
relative  adjustment  of  rates.  The  railroads  of  the  interior,  which  act 
as  feeders  to  the  Trunk  Lines,  and  divide  with  them  the  charges  on 
freights  moved  between  the  interior  and  the  seaboard,  are  also  inter- 


74  ATLANTIC    PORT   DIFFERENTIALS 

ested  to  the  extent  that  the  differentials  affect  their  proportion  of  the 
charges.  We  have  found  also  that  the  people  of  the  interior  consider 
their  interests  to  some  extent  involved  in  the  question ;  and  they  cer- 
tainly are  concerned  in  having  such  tariffs  of  charges  upon  the  roads 
over  which  their  traffic  is  conducted  as  will  give  them  the  advantages 
of  any  and  all  the  Atlantic  markets,  without  subjecting  their  dealings 
with  any  one  of  them  to  unfair  conditions  or  burdens.  It  is  therefore 
evident  that  the  question  is  one  of  very  general  interest ;  and  it  may 
almost  be  said  that  the  question  of  relative  equality  of  rates,  as  be- 
tween Chicago  and  the  Atlantic  ports,  when  those  between  the  other 
Western  towns  and  the  same  ports  are  measured  by  them,  is  one  of 
national  rather  than  of  local  concern. 

THE  SITUATION, 

Tliree  distinct  views  of  the  differential  rates  were  taken  and  urged 
before  us,  which  may  be  shortly  stated  as  follows :  The  New  York 
view,  that  the  differences  made  in  the  rates  in  favor  of  Baltimore  and 
Philadelphia  were  wholly  wrong  and  should  be  abrogated;  the  Balti- 
more view,  that  the  differentials  were  right  in  principle,  but  if  any- 
thing too  small;  the  Philadelphia  view,  that  the  differentials  should 
continue,  but  that  they  ought  not  to  discriminate  as  between  Phila- 
delphia and  Baltimore.  In  the  interior  we  encountered  much  differ- 
ence in  opinion,  but  no  views  distinctly  peculiar. 

The  discussion  was  open  at  New  York,  where  it  seemed  to  be  assumed 
that  the  parties  chiefly  concerned  were  the  three  cities  of  New  York, 
Philadelphia  and  Baltimore,  and  that  the  differentials  operated  to 
build  up  the  business  of  the  two  last  to  the  prejudice  of  that  of  New 
York.  On  this  assumption  it  was  then  said  they  were  unjust,  and  that 
it  was  the  duty  of  the  New  York  railroads  to  force  their  abrogation. 
It  was  also  assumed  that  two  of  the  Trunk  Line  railroads  were  peculi- 
arly New  York  roads,  whose  managers  ought  to  be  expected  to  labor 
especially  in  the  New  York  interests,  and  to  enter  into  the  rivalries  of 
that  city,  so  far,  at  least,  as  might  be  necessary  to  protect  the  com- 
merce of  New  York  against  injury  through  the  more  favorable  rates 
which  might  be  offered  by  the  Philadelphia  and  Baltimore  roads  to  the 
people  of  those  cities  respectively.  At  Philadelphia  a  somewhat  similar 
view  was  taken  of  the  obligation  of  the  Pennsylvania  Railroad  to  pro- 
tect Philadelphia  interests,  and  at  Baltimore  a  corresponding  pro- 
tection appeared  to  be  looked  for  at  the  hands  of  the  Baltimore  & 
Ohio  Railroad.  Thus  the  several  Trunk  Line  railroads  were  spoken  of 
as  New  York,  Philadelphia  and  Baltimore  roads  respectively,  and 
claims  of  a  local  nature  were  made  upon  them  as  being  such  roads. 


REPORT    UPON    DIFFERENTIAL    RATES  75 

Nothing,  however,  in  our  investigation  of  the  subject  has  struck  us 
more  forcibly  than  the  fact  that  the  growth  of  railroad  business  has 
been  such  as  to  take  from  the  several  Trunk  Line  roads  nearly  all  of 
purely  local  character  which  they  formerly  possessed.  The  time  ap- 
pears to  have  gone  by  when  the  interests  of  any  one  of  them  can  be 
concentrated  upon  and  bound  up  indissolubly  with  the  interests  of  any 
one  city,  so  as  to  constitute  it  either  the  dependent  or  the  champion  of 
that  city  as  against  the  rest  of  the  Union,  or  even  as  against  any  other 
commercial  centre  of  the  Union.  The  arms  of  every  one  of  these  roads 
reach  out  in  ever}-  direction  to  embrace  and  gather  in  the  business  of 
the  country,  and  to  distribute  impartially  according  to  need  and  de- 
mand. States  and  cities  have  called  particular  railroads  into  being, 
but  they  cannot  circumscribe  their  operations,  or  make  exclusive  ap- 
propriation of  their  benefits.  Once  constructed,  they  belong  to  a  pub- 
lic which  pays  little  regard  in  business  matters  to  State  lines,  and 
business  reasons,  which  have  general  influence  and  force,  control  their 
operations,  in  spite  of  local  sympathies  or  desires.  It  is  true  that  two 
of  the  Trunk  Line  railroads — the  New  York  Central  &  Hudson  River, 
and  the  New  York,  Lake  Erie  &  Western — hereinafter  spoken  of  as  the 
Central  and  the  Erie  respectively — find  the  largest  share  of  what  is 
called  their  through  business  directed  to  or  originating  at  the  City  of 
New  York,  and  it  may  be  that  their  managers  desire  to  bring  to  that 
city  all  the  business  they  can  control.  In  common  parlance,  there  is 
certainly  nothing  misleading  in  speaking  of  these  two  as  New  York 
roads ;  for  the  major  part  of  their  interests  center  in  New  York,  and 
whatever  benefits  or  injures  the  business  of  New  York,  must,  to  some 
extent,  benefit  or  injure  them  also.  But  these  roads  do  not  refuse 
freight  to  Baltimore,  Philadelphia  or  Boston;  on  the  contrary,  they 
enter  into  competition  for  them,  and  through  the  assistance  of  affili- 
ated roads,  endeavor  to  make  it  for  the  interest  of  the  people  of  those 
cities  to  avail  themselves  of  their  facilities  in  the  transportation  of 
goods  and  supplies.  They  thus  make  themselves  part  of  a  system  of 
competitive  roads,  which  offers  to  the  business  community  of  every 
Atlantic  seaport  a  choice  of  traffic  routes  and  traffic  agencies,  and 
they  solicit  business  on  the  necessary  understanding  that  they  shall 
respect  the  just  rights  and  claims  of  all  localities,  and  not  sacrifice  to 
New  York  the  interests  which  are  confided  to  them  elsewhere. 

It  is  also  not  misleading  to  speak  of  the  Baltimore  &  Ohio  Railroad 
as  a  Baltimore  road,  for  its  interests,  in  the  main,  centre  in  the  City  of 
Baltimore;  its  bonds  and  stocks  are  supposed  to  be  maiidy  held  or  con- 
trolled there,  and  its  traffic  is  mainly  between  that  city  and  the  in- 
terior.   But  this  road,  no  more  than  the  New  York  roads,  consents  to 


76  ATLANTIC    PORT   DIFFERENTIALS 

stand  apart  from  the  railroad  system  of  the  couDtry,  as  a  road  limiting 
its  business  to  a  single  Atlantic  terminus,  and  declining  general  com- 
petition. On  the  contrary,  it  solicits  business  at  the  seaports  to  the 
north  of  Baltimore ;  and  that  its  efforts  in  that  direction  have  a  fair 
measure  of  success  is  evidenced  by  the  fact  that  in  the  year  1880  it 
carried  of  the  westward  bound  freight  moved  by  the  Trunk  Line 
roads  from  New  York  more  than  eight  per  cent.,  from  Philadelphia 
more  than  nine  per  cent.,  and  from  Boston  about  five  per  cent.,  and 
these  proportions  are  fairly  representative  of  the  general  run  of  its 
traffic.  These  facts  are  sufficient  to  show  that  neither  the  New  York 
roads  nor  the  Baltimore  road  are  so  exclusively  linked  to  the  business 
interests  of  those  cities  respectively  as  to  be  either  unable  or  unwilling 
to  share  in  or  contribute  to  the  prosperity  of  rival  cities.  And  it  is  now 
publicly  said  and  seems  to  be  understood  that  the  Baltimore  &  Ohio 
is  seeking  to  obtain  an  independent  line  into  New  York,  that  it  may 
make  its  competition  at  that  point  still  more  active  and  efficient. 

It  certainly  cannot  be  claimed,  with  much  appearance  of  plausibility, 
that  the  Pennsylvania  Railroad  is  the  road  of  any  particular  city.  The 
company  which  owns  it  is  indeed  a  Pennsylvania  corporation,  its 
officers  are  in  the  City  of  Philadelphia,  its  stocks  and  bonds  are  largelj^ 
held  there,  and  perhaps  not  largely  held  elsewhere  in  this  country,  and 
it  is  not  improbable  that  the  feelings  and  s^'mpathies  of  those  who 
manage  its  concerns  would  incline  them  to  desire  specially  the  growth 
and  prosperity  of  Philadelphia  above  other  places.  But  the  road  has 
its  eastern  terminus,  not  at  Philadelphia,  but  on  the  harbor  of  New 
York,  where  it  has  made  large  and  costly  preparations  to  compete  with 
the  Central  and  the  Erie  for  New  York  business.  That  it  does  compete 
with  those  roads  successfully  is  shown  by  the  enormous  amount  of 
freight  which  it  moves  from  and  carries  into  that  city,  and  by  the  fact 
that  the  merchants  of  New  York  have  come  to  look  upon  it,  with 
entire  justice,  as  one  of  the  most  important  channels  of  communication 
with  the  West.  In  the  year  1880  this  road  took  out  of  New  York 
twenty-six  per  cent,  of  the  westbound  freight  carried  by  the  Trunk 
roads,  and  delivered  to  it  nearly  twenty  per  cent,  of  the  eastbound. 
While  thus  successfully  bidding  for  the  custom  and  favor  of  New 
York,  it  is  plain  that  the  Pennsjdvania  Railroad  cannot  antagonize  the 
interests  of  New  York  unfairly,  and  must  refrain  from  any  attempt 
to  subordinate  them  to  the  rival  interests  which  it  also  endeavors  to 
serve.  It  is  a  necessary  condition  of  its  competition  for  the  trade  of 
New  York,  that  it  shall  make  its  services  beneficial,  and  that  it  shall 
offer  facilities  which  are  not  surpassed  by  those  offered  by  other  roads. 
But  the  Pennsylvania  also,  through  its  association  with  the  Northern 


REPORT   UPON    DIFFERENTIAL   RATES  77 

Central,  competes  with  marked  success  for  the  trade  of  Baltimore,  and 
took  away  from  that  city  in  the  year  1880  twenty -throe  per  cent,  of  the 
westbound  freight  carried  by  the  American  Trunk  Line  roads.  Its 
share  in  the  eastbound  freight  Avas  still  more  considerable,  being  forty 
per  cent.  What  is  said  of  its  relations  to  New  York  business  may 
therefore  with  equal  truth  be  said  of  its  relations  to  the  business  of 
Baltimore ;  it  must  hold  itself  above  the  rivalries  of  locality,  and 
assume  the  attitude  of  an  impartial  carrier,  desirous  of  the  favor  and 
custom  of  the  whole  country,  and  willing  and  anxious  to  serve  all 
localities  on  such  terms  as  are  relatively  equal  and  substantially  just. 

It  is  not  likely  that  this  reaching  out  of  all  the  Truuk  Line  roads  to 
compete  with  each  other  in  the  several  Atlantic  cities  was  contemplated 
when  the  roads  were  originally  constructed:  but  as  the  several  lines 
have  pushed  their  connections  in  the  West  in  competition,  it  has  been 
found  desirable  for  each  to  offer  to  its  patrons  the  advantages  of  as 
many  markets  as  possible,  and  to  carry  for  them,  without  breaking 
bulk,  whatever  they  have  had  for  carriage  in  an  eastward  or  westward 
direction.  Competition  has  thus  made  roads  national  which  were  once 
local,  and  it  is  vain  to  expect  that  so  important  a  subject  as  that  of 
differential  rates  will  be  settled  on  the  local  preferences  or  prejudices 
of  those  who  may  have  authority  in  railroad  circles.  It  must,  there- 
fore, be  settled  either  arbitrarily,  by  the  fiat  or  agreement  of  the  trans- 
portation companies,  or  it  must  be  determined  by  some  underlying 
principle.  We  agree  with  what  was  said  in  the  New  York  discussions 
and  elsewhere,  that  any  arbitrary  adjustments  in  disregard  of  such 
principles  as  would  naturally  influence  prices  of  transportation  when 
untrammeled,  would  not,  could  not,  and  ought  not  to  be  upheld.  There 
should  be — and  as  we  think  there  must  be — some  principle  by  which 
to  determine  such  a  question,  or  perhaps  two  or  more  principles  acting 
upon  and  qualifying  each  other. 

It  has  been  assumed  in  the  discussions  we  have  listened  to,  that  busi- 
ness would  be  invited  to  a  city  by  low  rates  upon  its  railroad  lines, 
and  that  the  prosperity  of  the  city  would  bear  some  relation  to  these 
rates.  How  far  this  assumption  is  likely  to  be  well  founded,  we,  of 
course,  have  no  more  means  of  judging  than  has  the  general  public. 
But  the  fact  that  each  of  the  Trunk  Line  roads  has  its  relations  to  all 
the  cities,  and  each  city  receives  benefits  from  all  the  roads,  is  sufficient 
to  suggest  some  question,  whether  low  relative  rates  and  large  relative 
business  will  necessarily  go  together.  Though  it  is  true,  as  we  think 
and  have  said,  all  the  roads  which  compete  for  the  business  of  a  place 
must  treat  its  interests  fairly,  and  not  subordinate  them  to  the  interests 
of  rival  places ;  yet  it  must  be  expected  that  they  will  at  all  times  Have 


78  ATLANTIC    PORT   DIFFERENTIALS 

primarily  in  view  their  own  interests,  and  that  their  zeal  to  procure 
business  will  bear  some  proportion  to  the  anticipated  profits.  If  New 
York  business  is  most  remimerative,  it  will  be  sought  most  eagerly ;  if 
not,  the  railroad  managers  will  direct  attention  to  that  which  is.  Re- 
ducing the  New  York  rates  relatively  to  those  of  Philadelphia  and 
Baltimore,  seems,  therefore,  to  invite  the  roads  to  favor  particularly 
the  business  of  the  two  cities  last  named.  Establishing  differential 
rates  in  favor  of  Philadelphia  and  Baltimore  holds  out  inducements  to 
the  railroads  to  favor  the  New  York  trade.  The  Pennsylvania  Com- 
pany may  be  expected  to  desire  to  carry  freights  past  Philadelphia  to 
New  York  if  it  can  be  paid  for  the  additional  haul,  but  to  prefer  to 
leave  them  in  Philadelphia,  if  for  the  considerable  distance  from  there 
to  New  York  it  will  be  paid  nothing  for  the  transportation.  Thus  what 
each  city  asks,  appears  to  have  some  tendency  to  enlist  the  selfish  inter- 
ests of  the  railroad  companies  against  it.  "We  mention  this  among 
other  circumstances  affecting  the  question,  without  deeming  it  neces- 
sary to  remark  upon  it  further. 

THE  PRINCIPLES  THAT  SHOULD  CONTROL. 

It  seemed  to  be  taken  for  granted,  in  the  arguments  presented  to  us, 
that  the  existing  differentials  had  not  been  determined  on  any  prin- 
ciple, but  that  they  were  the  result  of  a  compromise  between  the  rail- 
road companies,  whereby  they  had  purchased  peace  between  them- 
selves. Three  different  principles,  however,  were  suggested  by  differ- 
ent parties,  as  those  which  should  control,  and  these  found  advocates 
in  different  localities,  according  as,  it  was  thought,  those  localities 
would  be  favored  by  their  operation  respectivel.y.  These  three  prin- 
ciples may  be  designated  respectively :  the  distance  principle,  the  cost 
principle  and  the  competitive  principle.  It  is,  however,  proper  to  say 
that  those  who  advocated  the  first  and  the  second  of  these  principles, 
generally  agreed  that  the  third  should  not  be  discarded ;  but  that  it 
had  its  legitimate  place,  and  must  have  its  legitimate  influence  also. 
Brief  notice  will  be  taken  of  these  three  principles  respectively. 

THE  DISTANCE  PRINCIPLE. 

It  was  contended  by  the  commercial  representatives  of  Philadelphia 
and  Baltimore,  that  freight  charges  on  like  classes  of  freight  between 
the  interior  and  the  seaboard  cities  ought  to  be  proportioned  to  dis- 
tance. We  understood  them  to  mean  by  this,  that  the  shortest  line 
from  Chicago  to  each  of  the  Atlantic  cities  should  be  taken  as  the 
standard  for  measuring  the  freight  charges  between  Chicago  and  that 
city,  and  that  the  charges  for  all  the  cities  should  then  be  determined 


REPORT   UPON   DIFFERENTIAL   RATES  79 

by  the  mileage.  By  referring  to  the  accompanying  note,  it  will  be 
seen  that  if  the  mileage  standard  were  adopted,  the  freight  charges 
between  New  York  and  Chicago  would  be  abont  ten  per  cent,  greater 
than  those  between  Philadelphia  and  Chicago,  and  about  thirteen  per 
cent,  more  than  those  between  Baltimore  and  Chicago.  Those  between 
New  York  and  Cincinnati  would  be  about  twenty-eight  per  cent,  more 
than  between  Philadelphia  and  Cincinnati,  and  about  thirty-eight  per 
cent,  more  than  between  Baltimore  and  Cincinnati.*  According  to 
the  average  rates  on  grain  and  provisions  this  year,  the  differentials 
have  only  been  about  six  and  two-thirds  per  cent,  in  favor  of  Phila- 
delphia, and  ten  per  cent,  in  favor  of  Baltimore;  and  the  distance 
principle  would,  therefore,  on  an  average,  increase  them  greatly.  It 
was  urged  that  it  was  by  this  principle  that  the  several  roads,  consti- 
tuting a  competing  line,  are  accustomed  to  apportion  their  joint 
charges,  and  that  these  very  Trunk  Lines  adopt  it  in  dividing  the 
charges  upon  through  freights  with  the  roads  from  which  they  receive 
the  freight,  or  to  which  thej^  deliver  it.  The  New  York  representa- 
tives, on  the  other  hand,  contended  that  the  distance  principle  could 
not  with  any  justice  control,  for  the  reason  that  distance  does  not  meas- 
ure either  the  cost  or  the  value  of  the  service ;  so  that  if  adopted  as  the 
standard  of  charges,  it  would  be  an  arbitrary  standard,  and  the  element 
of  equity  in  the  rates  would  be  disregarded. 

If  there  were  between  each  of  the  Atlantic  cities  and  the  interior 
towns  only  a  single  line  of  railroad  communication,  some  of  the  diffi- 


*DISTANCES  VIA  THE  SHOETEST  RAIL  ROUTES  TO 

Boston.     New  York.     Phila.    Baltimore. 

Chicas:o 1,009  900  823  80L' 

BurUngtou,  la 1,216  1,106  1,030  995 

Cincinnati   927  743  667  576 

Columbus,  0 807  623  547  512 

Cleveland 671  580  504  483 

Detroit 724  673  682  661 

Indianapolis 951  810  735  700 

Kansas  City 1,487  1,324  1,248  1,192 

Louisville." 1,161  870  794  706 

Memphis 1,438  1,247  1,171  1,083 

Milwaukee   998  947  908  887 

Omaha 1,503  1,393  1,317  1,294 

St.  Louis 1,212  1,050  973  917 

St.  Paul   1,418  1,308  1,232  1,211 

St.  Joseph 1,478  1,356  1,280  1,223 

Toledo     784  693  617  596 

Taking  Boston  as  the  standard,  New  York  averages  twelve  per  cent,  nearer  to 
these  towns,  Philadelphia  eighteen  and  Baltimore  twenty-two  per  cent,  nearer. 

Between  New  York  and  Cliicago  the  line  of  the  Pennsylvania  Railroad  is  forty- 
seven  miles  shorter  than  that  by  the  Erie  and  its  connections,  fifty  miles  shorter 
than  that  by  the  New  York  Central  and  its  connections,  and  one  hundred  and  four- 
teen miles  shorter  than  that  by  the  Baltimore  &  Ohio  and  its  connections. 


80  ATLANTIC    PORT   DIFFERENTIALS 

culties  iu  the  way  of  the  application  of  the  distance  principle,  which 
are  now  obvious,  would  be  wanting.  But,  as  has  been  said  already, 
every  one  of  those  cities  has  several  lines,  and  would  be  content  with 
no  less.  The  supposed  distance  principle  ignores  this  fact :  selecting 
the  shortest  line  to  each  city,  to  the  disregard  of  the  rest,  and  esti- 
mating the  charges  in  proportion  to  its  length.  It  might  thus  happen 
that  the  charges  on  freights  from  Chicago  to  the  several  seaboard  cities, 
with  all  their  roads  taken  into  the  account,  would  bear  no  proportion 
whatever  to  the  distance;  and  it  is  certain  that  as  between  the  roads 
serving  the  same  city,  the  supposed  principle  could  not  be  applied  at 
all,  for  they,  irrespective  of  distance,  must  conform  to  the  lowest  rates: 
The  distance  apportioned  would,  therefore,  not  be  an  apportionment  of 
principle,  but  only  of  expediency;  and  whether  expedient  or  not,  must 
depend  somewhat  on  other  considerations,  which  present  themselves  in 
the  practical  administration  of  railroad  affairs. 

It  cannot  be  said,  however,  that  distance  is  a  circumstance  without 
value  in  the  determination  of  railroad  tariffs ;  it  is,  on  the  other  hand, 
one  of  much  importance.  Nearness  to  the  producers  and  consumers 
of  the  articles  which  it  handles  is  a  great  advantage  to  any  city ;  and 
so  far  as  the  rivals  of  New  York  are  possessed  of  this  advantage,  they 
are  justified  in  expecting  that  it  will  be  recognized.  But  the  value  of 
this  advantage  is  a  question  that  must  be  determined  with  many  other 
things  taken  into  the  account,  and  can  only  be  fully  solved  in  the  tests 
of  competition.  The  general  fact  now  is  that  distance  does  not  deter- 
mine railroad  charges,  and  that  where  competition  is  most  active  it  in- 
fluences them  the  least.  The  distance  principle  does  not,  therefore, 
stand  the  test  of  competition,  and  so  far  as  we  can  perceive,  there  is  no 
possibility  of  establishing  it  except  by  subordinating  competition  alto- 
gether, to  it.  But  to  do  this  would  require  an  exercise  of  arbitrary 
authority  which  we  do  not  understand  those  who  advocate  the  dis- 
tance principle  to  advise  or  desire.  We  must  conclude,  therefore,  that 
distance  cannot  supply  for  us  the  controlling  principle,  nnd  that  its 
proper  influence  upon  transportation  charges  cannot  be  determined 
either  arbitrarily  or  as  a  matter  of  antecedent  computation  or  estimate. 

THE   COST   PRINCIPLE. 

New  York  parties  who  rejected  the  distance  principle  were  inclined 
to  favor  the  grading  of  rates  by  the  cost  of  service ;  and  if  this  were 
done,  they  claimed  that  the  differentials  would  disappear  altogether.' 
Cost  of  service  is  here  employed  as  synonymous  with  the  phrase  cost 
of  moving  freight,  which  is  most  commonly  used.  The  latter  phrase, 
however,  is  used  in  two  very  different  senses,  which  it  may  be  ira- 


REPORT    UPON    DIFFERENTIAL    RATES  81 

portant  to  distinguish  in  order  to  avoid  misconception.  Railroad  com- 
panies use  the  phrase  for  their  own  purposes  when  making  reports  to 
their  stockholders  or  for  the  public  under  the  requirements  of  State 
laws.  In  such  reports  cost  of  moving  freight  will  be  understood  to  be 
the  actual  outlay  by  the  railroad  company  in  moving  its  freight  over 
a  completed  and  equipped  road.  This  outlay  will  embrace  the  cost 
of  fuel,  the  compensation  to  the  regular  freight  agents,  to  freight  so- 
licitors, if  any,  to  the  servants  employed  to  handle  the  freight  and 
govern  and  move  the  trains.  It  must  also  embrace  the  necessary  ex- 
pense of  keeping  good  the  freight  equipment,  and  it  should  include  a 
fair  proportion  of  all  such  expenses  of  the  company  as  are  incurred 
for  the  freight  and  passenger  traffic  in  common,  such  as  repairs  of 
track,  taxes,  official  salaries,  legal  expenses,  office  expenses,  general 
advertising,  etc.  To  all  these  must  be  added  the  cost  of  insurance 
against  losses  to  freight  and  freight  equipment  by  casualties  of  all 
descriptions,  or  of  making  good  such  losses.  If  all  these  items  are 
added  together  and  the  sum  total  is  divided  by  the  number  of  tons  of 
freight  moved  one  mile  upon  the  road,  we  have  as  the  result  the  aver- 
age cost  of  transporting  a  ton  of  freight  for  one  mile  of  distance. 

The  report  which  gives  these  items  will  also  give  others  that,  as  be- 
tween the  railroad  company  and  its  patrons,  must  be  understood  as 
constituting  a  part  of  the  cost  of  service.  If  the  compan.y  owes  debts, 
the  interest  paid  upon  these  should  be  included;  if  it  has  made  divi- 
dends to  its  stockholders,  the  amount  should  be  included  also.  Indeed, 
it  is  generally  conceded  that  the  cost  of  service  should  rightfully  and 
equitably  be  made  to  inelude  a  fair  return  in  interest  or  dividends  on 
the  cost  of  the  railroad  investment ;  though  as  to  what  return  is  fair 
and  reasonable,  differences  in  opinion  are  held  and  expressed.  But 
for  our  present  purposes  it  is  sufficient  to  leave  any  such  differences 
out  of  view,  and  to  speak  in  general  terms  of  the  cost  principle  as  that 
which  would  measure  the  railroad  charges  by  the  cost  of  service,  and 
which  would  make  the  cost  of  service  embrace  the  actual  outlay  of  the 
railroad  company  as  above  explained,  and  a  fair  return  in  interest  or 
dividends  on  the  cost  of  the  road  and  its  equipment. 

To  show  that  the  cost  principle  would  be  to  the  advantage  of  New 
York,  it  became  necessary  to  show  that  the  cost  of  transporting  freight 
between  New  York  and  Chicago  was  or  ought  to  be  less  than  the  cost 
between  Philadelphia  and  Chicago,  or  Baltimore  and  Chicago,  or  at 
least  that  it  was  not  greater.  But  upon  this  point,  unfortunately,  the 
information  that  was  produced  before  us  did  not  appear  to  be  very 
precise  or  very  accurate.  The  expressions  of  opinion  were  indeed  clear 
and  strong,  but  they  were  generally  supported  by  argument  and  in- 
6 


82  ATLANTIC   PORT   DIFFERENTIALS 

ference  rather  than  by  evidence.  Onr  attention  was  not  directed  to 
official  reports  or  figures,  where  or  b}^  which  tlie  actual  cost  was  set 
forth,  but  rather  to  the  topographical  features  of  the  country  between 
New  York  and  the  head  of  Lake  Michigan,  Avhich  it  was  said  offered 
admirable  facilities  for  the  construction  of  railroads,  which  would  be 
economical  in  original  outlay,  and  economical  also  in  their  operation. 
No  such  economical  road,  it  was  said,  had  been  or  could  be  constructed 
further  to  the  south,  and  the  unfavorable  gradients  and  curvatures  on 
the  Pennsylvania  and  the  Baltimore  &  Ohio  roads  more  than  deprive 
them  of  all  the  advantages  which  they  possess  in  shorter  distance.  It 
was  also  urged  that  another  important  circumstance  should  be  taken 
into  the  account  when  the  cost  is  being  estimated.  By  far  the  larger 
portion  of  all  the  freight  carried  by  the  Trunk  Lines  is  eastward  bound. 
When  cost  is  considered  the  probability  of  return  freights  must  be 
taken  into  the  account,  since  to  whatever  extent  the  cars  which  convey 
freight  to  the  seaboard  must  be  returned  without  loading,  the  cost  of 
the  return  must  be  reckoned  as  part  of  the  cost  of  transporting  the  east- 
bound  freight.  And  it  was  confidently  asserted  than  the  probability 
of  obtaining  remunerative  return  freights  was  much  greater  at  New 
York  than  elsewhere  on  the  Atlantic  coast. 

To  make  out  the  case  of  more  favorable  lines  and  gradients  between 
Chicago  and  New  York,  the  route  is  required,  after  it  leaves  the  shore 
of  Lake  Erie,  to  follow  substantially  the  course  of  the  Erie  Canal  to 
the  Hudson,  and  thence  down  that  river.  By  that  route  a  road  has 
been  constructed  Avith  few  unfavorable  grades  and  curves,  and  this 
road  no  doubt  is  or  can  be  operated  with  much  greater  economy  than 
would  be  possible  if  its  line  were  through  a  mountainous  region.  But 
if  we  take  this  as  the  route  for  freight  transportation  between  New 
York  and  the  interior,  and  compare  it  with  the  routes  to  Philadelphia 
and  Baltimore  over  the  roads  which  carry  most  freights  to  those  cities 
respectively,  we  commit  the  mistake  of  directing  our  attention  exclu- 
sively to  the  one  road  which  possesses  this  favorable  line,  and  ignoring 
altogether  the  fact  that  New  York  has  other  roads  which  it  is  desirable 
for  its  interest  should  live  and  prosper,  and  that  over  each  of  them 
the  active  and  energetic  merchants  and  manufacturers  of  that  city  are 
seeking  the  business  of  the  interior  and  inviting  its  jpustom.  Every  one 
of  those  roads  brings  to  New  York  a  large  amount  of  trade  which  would 
not  be  obtained  without  its  facilities;  and  it  seems  certain  that  New 
York  cannot  afford  to  ignore  any  one  road,  any  more  when  it  is  settling 
its  grievances  with  rivals  than  when  estimating  advantages  over  them. 
If,  therefore,  it  be  demonstrated  that  the  New  York  Central  and  its 
connecting  roads  can  transport  western  products  from  the  interior  to 


REPORT  UPON  DIFFERENTIAL  RATES  83 

New  York  as  cheaply  as  the  more  southern  roads  can  move  them  to 
Baltimore  or  Philadelphia,  it  may  not  follow  tliat  tlie  interests  of  New- 
York  would  be  subserved  by  the  adoption  of  the  cost  principle  and  the 
bringing  of  the  charges  on  freiglit  transportation  to  and  from  New 
York  to  the  test  of  what  the  Central  could  afford.  Prudence  would  re- 
quire that  at  least  the  probable  consequences  should  be  considered ;  and 
if  among  these  consequences  should  be  the  possibility  of  some  other  line 
to  New  York  being  found  unable  to  endure  the  test  of  the  cost  prin- 
ciple, this  of  itself  ought  to  raise  some  doubt  whether  the  city  of  New 
York  could  be  interested  in  establishing  it.  Now,  the  very  claim  that 
is  made  in  behalf  of  the  New  York  Central  route,  as  one  of  remarkable 
economy,  assumes  that  the  Pennsylvania  route  is  less  economical ;  and 
the  assertion  that  the  C antral  can  carry  from  Chicago  to  New  York 
as  cheaply  as  the  Pennsylvania  can  carry  from  Chicago  to  Philadel- 
phia, contains  within  it — since  the  less  is  contained  in  the  greater — 
that  the  Central  can  carry  from  Chicago  to  New  York  cheaper  than  the 
Pennsylvania,  which  only  reaches  New  York  by  carrying  past  Phila- 
delphia, can  possibly  do.  The  application  of  the  cost  principle,  if 
made  under  such  circumstances,  must  force  the  Pennsylvania  to  this 
alternative :  that  it  must  carry  at  rates  which  will  not  give  to  the  com- 
pany a  fair  return  in  profits,  or  it  must  give  up  competition  for 
New  York  business ;  and  the  Erie,  whose  line  is  also  assumed  to  be  less 
favorable  than  that  of  the  Central,  might  be  compelled  to  face  the  same 
alternative.  It  probably  would  not  be  contended  that  either  the  Grand 
Trunk  or  the  Baltimore  &  Ohio,  whose  lines  to  New  York,  through  con- 
necting roads,  are  so  much  longer  than  those  of  the  Pennsylvania, 
could  compete  at  all  for  New  York  business  under  a  strict  application 
of  the  cost  principle.  The  natural  tendency  of  its  application  wouhl, 
therefore,  be  in  the  direction  of  throwing  upon  one  of  the  existing  lines 
to  New  York  the  bulk  of  the  New  York  business,  to  the  destruction  of 
the  others,  and  to  the  final  destruction  of  competition.  It  is  not  to  be 
assumed  that  this  is  what  New  York  desires.  Eveiy  great  city  finds 
it  conducive  to  its  prosperity  to  secure  as  many  of  these  avenues  of 
trade  and  travel  as  possible;  and  it  is  certainly  not  more  important  to 
gain  a  new  line  than  to  preserve  one  already  in  existence,  and  already 
equipped  with  all  those  powers  of  usefulness  which  a  new  project  can 
only  promise  at  some  time  in  the  future.  If,  therefore,  the  cost  prin- 
ciple were  to  be  adopted  for  regulating  the  charges  as  between  the  com- 
peting cities,  it  would  seem  that  New  York  ought  to  bring  into  the  cal- 
culation not  one  road  only,  and  that  the  one  most  economical  in  con- 
struction and  operation,  but  all  the  roads  which  contribute  to  its  pros- 
perity, and  which  it  desires  to  retain. 


84  ATLANTIC    PORT    DIFFERENTIALS 

At  Philadelphia  and  Baltimore  it  is  asserted  with  great  coufidence 
that  over  no  one  of  the  New  York  roads  can  freights  be  conveyed  as 
cheaply,  from  Chicago  to  New  York,  as  they  can  be  over  the  Pennsyl- 
vania and  the  Baltimore  &  Ohio  roads  to  Philadelphia  and  Baltimore 
respectiveh\  For  this  confidence  certain  facts  are  stated  which  are 
supposed  to  be  sufficient  to  produce  the  result,  and  official  reports  are 
cited  as  evidence  that  the  result  has  followed.  The  favorable  lines  of 
the  New  York  Central,  and  its  affiliated  roads,  are  admitted ;  but  it  is 
contended  that  all  the  advantage  of  these  is  more  than  neutralized  by 
greater  distance  and  the  greater  cost  of  fuel  to  the  New  York  roads 
ever  those  to  the  south  of  them.  The  Penns^ylvania  and  the  Baltimore 
&  Ohio  roads  find  the  coal,  which  represents  their  motive  power,  in 
beds  at  various  points  on  their  lines,  and  can  take  it  up  for  use  at  little 
more  than  the  cost  of  handling;  while  the  New  York  roads,  on  the 
other  hand,  and  especially  the  Central,  must  transport  the  coal  for  a 
long  distance  at  a  cost  two  or  three  times  as  great.  "This  cost  consti- 
tutes a  very  considerable  part  of  the  total  expense  of  moving  freight, 
and  it  cannot  be  overlooked  or  treated  as  of  little  moment. 

The  official  figures  to  which  attention  was  called  to  show  the  greater 
cost  on  the  New  York  lines  are  to  be  found  in  the  reports  of  the  New 
York  Central,  the  Erie  and  the  Pennsylvania,  made  by  the  directors 
to  the  stockholders,  to  show  the  operation  of  the  roads  for  the  years 
1880  and  1881.  In  those  reports  estimates  are  made  of  the  cost  to  the 
companies  respectively  of  moving  one  ton  of  freight  for  one  mile  of  dis- 
tance, omitting  from  the  calculation  the  items  of  interest  and  profits. 
The  reports,  as  will  be  seen  on  referring  to  the  note  in  the  margin, 
make  a  very  unfavorable  showing  for  New  York;*  and  if  the  figures 
told  the  whole  story,  and  if  we  could  be  assured  that  they  were  made 
by  each  company  on  the  same  basis,  they  would  go  very  far  toward 
justifying  the  other  cities  in  the  claims  they  make.  But,  unfortunately, 
these  reports  are,  for  our  purpose,  of  little  value.  They  cover  too  much 
in  some  respects,  and  too  little  in  others,  to  give  us  the  information  we 
need.  1.  The  Trunk  Line  companies  report  the  cost  over  their  own 
roads  only,  and  do  not  include  the  cost  over  the  feeder  roads;  but 
what  we  need  to  know  is  the  cost  of  transportation  over  the  whole  line 
from  western  points  to  the  seaboard.  2.  The  companies  in  their  re- 
ports do  not  discriminate  between  the  cost  of  transporting  local  freight 


*Cost  of  moving  freight  per  ton  for  one  mile  of  distance: 

On  the  New  York  Central,  1880,  5.41  mills.     1881,  5.62  mills. 
On  the  Erie,  "      5.34     "  "      5.29     " 

On  the  Pennsylvania,  ' '      4.74     "  "      4.37     ' ' 

No  corresponding  figures  are  given  in  the  reports  of  the  Baltimore  &  Ohio  E.  R. 
Co. 


REPORT    UPON    DIFFERENTIAL    RATES  85 

and  through  freight,  but  endeavor  only  to  give  the  average  cost  of 
moving  both.  But  here  the  reports  embrace  too  much  for  our  purposes, 
for  on  this  inquiry  we  are  interested  only  in  the  cost  of  moving  through 
freight.  If  the  freights  over  all  the  roads  were  similar  in  kind,  and  if 
the  proportion  of  through  freight  to  way  freight  were  nearly  the  same 
on  all,  the  report  of  average  cost  might  be  accepted  as  indicating  the 
proportionate  cost  to  each  road  of  its  through  freights.  But  we  must 
take  notice  of  the  fact,  which  is  matter  of  common  knowledge,  that  the 
character  of  local  freight  is  exceedingly  diverse  on  the  diflferent  roads, 
and  that  the  cost  of  handling  is  far  from  being  uniform.  If  one  com- 
pany, for  example,  handles  coal  in  large  quantities  as  way  freight, 
loading  a  train  completely  at  one  station,  and  moving  it  to  another  for 
complete  unloading,  the  cost  of  such  business  would  furnish  very  un- 
safe and  unreliable  means  of  comparison  with  that  of  the  local  freight 
of  miscellaneous  articles,  which  another  road  might  pick  up  in  small 
quantities  at  many  way  stations,  and  deliver  at  as  many  more.  But 
these  railroad  companies,  unfortunately,  have  as  yet  agreed  upon  no 
uniform  method  of  keeping  accounts,  whereby  they  may  determine,  by 
the  same  standards,  the  actual  outlay  of  the  roads  in  moving  their 
freights.  It  would  seem  that  there  ought  to  be  no  differences  in  this 
particular ;  but  the  official  reports  sometimes  disclose  on  examination 
that  the  diversities  are  very  considerable,  and  are  not  infreciuently 
met  with  in  the  accounts  of  the  same  company.  One  company,  for 
example,  when  it  is  able  to  make  such  betterments  as  station  houses, 
warehouses  and  side  tracks  from  its  current  receipts  without  increas- 
ing its  indebtedness,  may  charge  the  cost  to  operating  expenses,  while 
another  under  similar  circumstances  would  charge  them  to  construc- 
tion account,  and  still  another  would  include  them  in  operating  ex- 
penses for  the  time  being,  and  at  the  end  of  several  years  perhaps 
transfer  them  to  construction  account  for  the  purposes  of  a  new  issue 
of  stock.  Evidences  of  these  different  methods  of  procedure  appeared 
in  reports  of  different  companies,  which  were  made  use  of  for  their 
information  or  for  the  purposes  of  illustration  before  us.  It  is  no 
doubt  undesirable  that  there  should  be  this  diversity  in  practice ;  but 
while  it  exists  it  is  necessary  to  take  notice  of  it.  If  concert  of  action 
among  railroad  managers  could  bring  about  a  uniform  system  of  ac- 
counts, so  that  the  official  reports  based  upon  them,  which  are  made 
periodically  for  the  information  of  shareholders,  might  give  valuable 
and  reliable  information  and  means  of  accurate  comparison  to  the  pub- 
lic as  well,  the  change  in  methods  would  be  likely  to  prevent  many 
misconceptions  and  misconstructions  of  corporate  action  which  now 


86  ATLANTIC    PORT   DIFFERENTIALS 

arise  in  the  public  mind,  and  which  lead  to  both  public  and  corporate 
annoyances. 

For  all  the  reasons  assigned,  we  are  without  reliable  information  by 
whicli  to  apply  the  cost  principle  in  the  regulation  of  charges  of  trans- 
portation between  the  Atlantic  cities  and  the  interior,  and  we  cannot 
say  that  the  application  would  be  to  the  advantage  of  New  York. 
Prima  facie  the  case  seems  to  be  against  New  York,  especially  when  the 
Pennsylvania  Railroad,  which  constitutes  one  of  its  most  important 
lines,  is  taken  into  the  account.  It  is  very  manifest  that  that  railroad 
can  leave  freights  at  Philadelphia  more  cheaply  than  it  can  transport 
them  the  additional  eighty-seven  miles  to  New  York,  and  probably  it 
can  deliver  them  for  still  less  at  Baltimore,  since  the  unfavorable  grades 
of  the  road,  to  which  much  importance  was  attached  in  the  New  York 
arguments,  are  all  passed  before  Harrisburg  is  reached,  and  from  that 
point  the  line  made  use  of  by  the  Pennsylvania  to  reach  Baltimore,  is 
shorter  than  the  line  to  Philadelphia. 

The  favorable  influence  which  the  concentration  of  foreign  com- 
merce at  New  York  ought  to  have  upon  railroad  rates  between  that 
city  and  the  interior,  may  perhaps  be  something,  for  freight  tariffs 
ought  to  be,  and  will  be,  arranged  with  regard  to  the  probability  of 
compensating  freights  in  both  directions.  When  a  railroad  company 
can  have  freights  in  one  direction  only,  and  must  return  its  cars  empty, 
it  must  necessarily  make  the  freights  pay  for  the  cost  of  the  return.  In 
the  eastern  and  western  transportation  we  have  an  illustration  of  this 
state  of  things.  It  is  matter  of  familiar  knowledge,  that  much  the 
largest  proportion  of  freight  is  eastward  bound,  and  that  large  num- 
bers of  unloaded  cars  are  constantly  being  sent  west  over  all  the  roads. 
If  the  course  of  trade  were  such,  that  any  one  of  the  Atlantic  cities 
sent  out  by  rail  as  much  freight  as  it  received,  its  advantage  over  the 
others  would  be  obviously  very  great.  Railroad  companies  could  af- 
ford to  make  much  better  rates  upon  all  freights  bound  to  the  city 
from  which  they  were  certain  of  compensating  return  loads.  It  is 
proper,  therefore,  that  railroad  companies  should  take  into  considera- 
tion the  condition  of  things  in  this  regard,  and  every  participant  in 
foreign  commerce  has  a  right  to  expect  that  this  will  be  done.  We 
have  therefore  directed  our  own  attention  to  the  differences  in  the 
freights  received  and  those  sent  out  by  the  four  leading  Atlantic  sea- 
board cities  over  the  four  American  Trunk  Lines,  and  have  given  in  a 
marginal  note  the  aggregates  for  the  year  1880,  which  will  be  suffi- 
cient for  the  purposes  of  approximate  comparison.*     The  table  shows 

*Freight  Tonnage  by  the  four  American  Trunk  Line  roads  for  the  year  1880 : 

Received.  Sent. 

New  York 4,266,830  1,022,612 

Boston  913,887  309,232 


REPORT    UPON    DIFFERENTIAL    RATES  87 

that  the  proportion  of  freiglit  sent  out  from  New  York  over  these  roads, 
when  compared  with  that  which  is  received  from  them,  is  considerably 
greater  than  the  proportion  at  either  Baltimore  or  Philadelphia,  but  it 
is  nevertheless  only  as  one  to  fonr  and  a  quarter,  and  it  is  manifest  that 
not  only  must  a  large  proportion  of  all  the  ears  which  go  loaded  to 
New  York  return  without  loads,  bnt  that  a  much  more  considerable 
number  must  so  return  from  New  York  than  from  either  of  the  other 
cities. 

While,  therefore,  New  York  has  an  advantage  over  its  rivals,  in  the 
larger  proportion  of  westbound  to  eastbound  freight,  the  advantage,  if 
estimated  by  the  bulk,  is  not  very  great.  And  it  must  be  borne  in 
mind  that  these  four  cities  do  not  by  any  means  furnish  to  the  roads  all 
their  westbound  freight,  but  that  they  take  large  quantities  from  other 
towns  along  their  line.  It  may  be  that  New  York  westbound  freights 
average  highest  in  the  freight  tariffs,  but  even  then  the  relative  ad- 
vantage of  New  York  will  probably  be  less  considerable  than  some  of 
its  advocates  have  supposed.  And  on  a  careful  examination  of  all  the 
arguments  advanced  at  New'  York,  we  are  not  satisfied  that  a  strict  ap- 
l)lication  of  the  cost  principle,  if  it  should  be  found  susceptible  of  ap- 
plication, would  be  likely  to  benefit  the  trade  of  that  city  in  its  rivaliy 
with  the  other  Atlantic  cities. 

But  if  the  exact  cost  of  transporting  freight  by  rail  were  attainable, 
could  it  be  made  the  standard  whereby  to  measure  the  charges  as  be- 
tween competing  cities?  We  do  not  consider  now  what  might  be  just 
and  right  as  between  a  railroad  company  and  its  patrons  if  the  ease 
of  any  railroad  company  could  be  taken  up  and  considered  by  itself 
apart  from  all  others,  but  of  what  is  practicable  in  view  of  existing 
facts.  If  the  cost  principle  could  be  applied,  we  do  not  see  how  the 
railroad  companies  of  the  country  could  justly  complain  of  it.  If  they 
could  all  receive  for  the  transportation  service  the  cost  of  the  service, 
as  above  explained,  they  would  benefit  their  average  condition  very 
greatly  by  accepting  it,  for  they  are  not  now  receiving  on  an  average 
anything  near  the  average  legal  interest  of  the  country  on  the  cost  of 
their  investments.*     Many  of  the  companies — perhai)s  the  majority  of 


.    Philadelrhia   1,553,381  299,474 

Baltimore 1,559,251  241,600 

As  the  business  with  the  Grand  Trunk  of  Canada  is  not  covered  by  this  state- 
ment it  will  be  readily  understood  that  the  statement  is  not  so  favorable  to  Boston 
as  it  should  be,  as  its  business  with  the  Grand  Trunk  is  very  large. 

*Tn  Poor's  Manual  the  aggregate  cost  of  the  railroads  of  this  country  and  their 
equipment  to  ISSl,  is  given  at  $4,653,609,297.  The  railroad  companies  paid  in  18S0 
in  dividends,  $77,115,410;  and  for  interest  on  bonded  debt,  $107,866,328.  To  1SS2 
the  cost  was  $5,577,996,931.  There  was  paid  in  1881  in  dividends,  $93,344,200,  and 
for  interest  $128,587,302.     It  will  be  seen  that  the  dividends  and  interest  together 


88  ATLANTIC    PORT   DIFFERENTIALS 

them — in  order  to  realize  cost  would  be  compelled  to  increase  their 
charges  very  considerably,  while  others,  including  perhaps  some  of 
these  Trunk  Lines,  might  be  called  upon  for  a  reduction.  The  general 
result  would  be,  not  a  diminution  of  charges,  but  an  increase ;  and  it 
is  hardly  probable  that  the  country  at  large  would  be  satisfied  with  the 
change,  though  it  might  affect  particular  localities  favorably.  More- 
over, we  are  to  consider  that  the  question  of  the  application  of  the  cost 
standard  to  railroad  charges  arises  for  discussion  and  settlement  after 
cities  have  been  built,  routes  established,  canals  made  and  railroads 
constructed ;  and  that  the  solution  of  the  question  may  affect  all  these 
beneficially  or  otherwise  to  an  extent  that  is  beyond  present  calcula- 
tion. We  have  not  an  unsettled  country  before  us  to  plan  and  make 
laws  for,  whose  people  when  they  select  their  homes  and  places  of  busi- 
ness can  calculate  the  result  of  existing  rules  and  regulations  upon  the 
towns  they  build,  or  the  industries  they  establish ;  but  the  towns  al- 
ready exist,  and  have  been  created  at  immense  cost  in  view  of  ad- 
vantages which  were  supposed  to  make  them  attractive  and  desirable 
as  locations  for  trade  and  commerce ;  and  their  existing  importance  as 
the  homes  of  great  numbers  of  people,  and  as  the  centres  of  vast  manu- 
factures and  immense  exchanges,  gives  them  claims  upon  the  country 
and  upon  those  who  have  in  any  degree  the  material  interests  of  the 
country  in  charge,  and  gives  them  powers  of  defence  also  when  assailed 
in  the  rivalry  of  business  which  are  not  to  be  overlooked  or  lightly  re- 
garded. 

These  several  towns,  it  is  true,  came  into  existence  under  circum- 
stances which  may  be  different  from  those  which  now  surround  them  -. 
and  in  view  of  advantages,  which  in  many  cases  have  been  rendered 
comparatively  unimportant  by  subsequent  improvements  and  inven- 
tions— as  canal  and  river  navigation  in  many  parts  of  the  country  has 
been  rendered  unimportant  by  the  invention  of  the  locomotive  and  the 
iron  road — but  the  towns  themselves,  their  people  and  their  business, 
remain  as  great  and  sturdy  facts,  which  neither  the  country  can  over- 
look, nor  the  government  of  the  country,  nor  any  of  its  public  agencies. 
The  continued  existence  of  these  towns  is  to  be  assumed,  and  their  wel- 
fare is  to  be  calculated  for  when  laws  are  made,  or  regulations  having 
the  effect  of  laws  are  established.  It  would  be  as  inadmissible  and  as 
unjust  deliberately  to  plan  and  arrange  for  the  gradual  destruction  of 
a  great  city  through  the  slow  but  certain  annihilation  of  its  business, 
as  it  would  be  to  bring  destruction  upon  it  by  fire  or  pestilence ;   and 


are  about  four  per  cent,  on  the  cost  of  the  roads  and  equipment;  the  dividends  being 
much  the  smaller  part.  No  doubt  there  is  much  "watered"  stock,  and  a  large  al- 
lowance may  be  made  therefor,  without  afPecting  the  accuracy  of  the  statement  in 
the  text. 


REPORT   UPON   DIFFERENTIAL   RATES  89 

we  are  not  to  contemplate  with  conii)laeency  an  offence  of  that  nature 
against  organized  soeietr.  AVhile  it  is  not  the  province  of  government 
to  build  up  cities  for  its  people,  it  is  its  plain  duty  to  permit  the  cities 
the  people  built  to  live;  and  it  should  so  shape  its  own  action  as  to 
allow  every  town,  as  far  as  possible  and  reasonable,  to  avail  itself  of 
all  its  natural  and  acquired  advantages  in  adding  to  the  prosperity, 
happiness  and  comfort  of  the  local  community.  This  seems  too  plain 
and  indisputable  a  proposition  to  be  contested  by  any  official  authority 
or  public  agency. 

In  a  certain  sense  railroad  companies  are  public  agencies,  and  in 
some  degree  they  exercise  powers  which  are  quasi  governmental.  They 
make  regulations  for  their  business  to  which  the  general  public  are  ex- 
pected to  conform;  and  these  regulations  are,  in  some  respects,  as  im- 
portant as  the  police  laws  established  by  the  State  itself.  Among 
these  are  the  regulations  respecting  charges  for  railroad  service.  Ac- 
cording as  these  are  heavy  or  light  upon  the  traffic  of  a  particular  lo- 
cality, its  trade  is  likely  to  decline  or  prosper,  and  so  dependent  is  com- 
merce upon  railroads  that  the  growth  of  a  town  is  likely  to  bear  some 
proportion  to  the  extent  of  its  railroad  facilities,  and  the  liberality 
with  which  it  is  treated  by  railroad  managers. 

We  should  consider  then  what  might  be  the  effect  of  a  strict  applica- 
tion of  the  cost  principle  as  between  the  competing  Atlantic  cities,  say, 
for  illustration,  the  cities  of  Baltimore  and  New  York.  Baltimore  is 
now  a  large  and  prosperous  city ;  it  is  the  chief  business  centre  of  a 
territory  larger  than  any  one  of  the  States,  and  millions  of  people  find 
their  business  favored,  and  their  prosperity  and  comforts  enhanced  by 
its  existence.  One  of  the  most  costly  roads  of  the  country,  with  ex- 
tensive connections  and  feeders,  has  been  created  with  almost  exclusive 
regard  to  Baltimore  business;  and  the  road  will  prosper  if  the  city 
prospers,  and  lose  its  importance  if  the  city  decays.  A  great  number 
of  private  individuals  and  public  and  private  corporations  are  inter- 
ested in  the  stock  and  indebtedness  of  this  railroad  company,  and  would 
be  subjected  to  embarrassment  or  suffering  if  it  were  to  be  forced  into 
bankruptcy.  For  all  these  reasons  the  welfare  of  Baltimore  is  a  matter 
cf  national  importance,  and  it  is  so  connected  with  the  trade  of  the  in- 
terior that  its  existence  modifies  beneficially  all  the  markets.  But  its 
relations  to  the  foreign  trade  are  also  such  as  to  render  it  important  to 
the  whole  civilized  world. 

But  New  York  has  some  most  decided  advantages  over  Baltimore, 
of  which  its  people  have  availed  themselves  with  great  ability  and 
energy.  The  growth  of  that  city  has  not  been  checked  by  the  marvel- 
ous prosperity  of  other  towns,  and  its  relative  superiority  in  both  for- 


90  ATLANTIC    PORT   DIFFERENTIALS 

eign  and  domestic  commerce  has  been  substantially  maintained. 
Though  Baltimore  is  much  nearer  the  grain  fields  of  the  West,  New 
York  still  draws  to  itself  much  the  larger  share  of  the  harvests,  and  it 
has  done  this  in  spite  of  the  fact  that,  with  temporary  and  unimpor- 
tant exceptions,  the  differential  rates  have  at  all  times  been  largely 
against  that  city.  Suppose  now  that  under  an  application  of  the  cost 
principle  the  differentials  could  be  abrogated ;  what  would  be  the  effect 
upon  Baltimore  ?  Would  it  deprive  that  city  of  the  share  in  the  trade 
of  the  country,  which  its  location,  its  great  expenditures  and  the  skill 
and  enterprise  of  its  people  have  hitherto  secured  for  it?  Would  it 
check  the  growth  of  the  city,  sap  its  prosperity,  and  bring  ruin  upon 
those  everywhere  whose  business  arrangements  and  investments  have 
been  made  with  a  view  exclusively  or  mainly  to  the  trade  of  that  city? 
And  if  so,  would  the  result  be  one  that  the  countrj-  could  contemplate 
vrith  satisfaction  as  the  just  result  of  the  proper  application  of  a  sound 
Ijrinciple,  and  that  those  having  influence  in  railroad  affairs  could 
justly  and  properly  plan  for,  labor  for  and  shape  their  tariffs  to  ac- 
complish ? 

On  the  other  hand,  suppose  the  strict  application  of  the  cost  prin- 
ciple should  be  found  to  require  that  the  differentials  against  New 
York  should  be  doubled ;  would  it  be  admissible  to  double  them  irre- 
spective of  all  consequences  to  the  trade  and  prosperity  of  that  city? 
That  these  consequences  might  prove  disastrous  if  the  principle  could 
be  upheld  and  enforced,  seems  certain,  for  it  would  give  advantages  to 
the  town  most  favorably  located  for  cheap  commercial  intercourse  for 
vv'hich  the  others  could  have  no  compensation.  But  this  very  fact — 
if  there  were  no  other  impediment — would  render  the  application  of 
the  principle  impossible.  A  great  citj^  possesses  great  powers  of  self- 
protection,  and  it  must  exercise  them  to  the  fullest  extent  when  the 
need  comes.  Great  railroad  corporations  cannot,  in  their  rivalry  with 
each  other,  accept  principles  of  action  which  must  necessarily  im- 
poverish them.  If  the  Baltimore  &  Ohio  Railroad  would  lose  its  busi- 
ness under  the  application  of  the  cost  principle  as  between  it  and  the 
roads  north  of  it,  it  must  accept  less  returns  upon  its  business,  and  it 
must  continue  the  struggle  even  though  no  more  than  operating  ex- 
penses be  realized,  rather  than  submit  to  destruction  without  an  effort 
at  self-preservation.  This  or  something  like  it  must  be  the  inevitable 
result ;  for  neither  cities  nor  transportation  companies  can  or  will 
accept  a  principle  which  it  can  be  seen  in  advance  must  build  up  some 
on  the  ruin  of  the  others. 

But  when  it  comes  to  applying  the  cost  principle  to  the  several  lines 
which  serve  the  same  city,  it  is  at  once  perceived  that  the  difficulties 


REPORT    UPON   DIFFERENTIAL    RATES  91 

are  insurmountable.  The  application  must  of  course  be  made  on  esti- 
mates of  probable  results,  and  the  estimates  will  have  in  view  a  per- 
centage of  profits  which  it  is  expected  or  hoped  will  be  realized.  But 
with  four  or  more  lines  of  very  ditferent  length  competing  for  the 
same  business,  it  is  evident  that  cost  must  have,  when  applied  to  their 
business,  very  different  meanings.  If  the  shortest  and  cheapest  line 
makes  its  charges  on  a  calculation  of  say  ten  per  cent,  profit,  the  longest 
and  most  expensive  must  conform  to  the  charges,  even  though  they  be 
such  as  will  insure  no  profit  at  all.  One  company  may  then  carry  at  a 
cost  which  ineludes  ten  per  cent,  profit,  another  at  a  cost  which  in- 
cludes say  two  per  cent,  profit,  while  a  third  barely  paj's  its  operating 
expenses  and  repairs,  but  still  obtains  the  cost  of  moving  the  freight. 
Competiton  obliges  the  companies  to  take  what  they  can  get,  and  to 
satisfy  the  demands  upon  them  from  it ;  but  when  the  cost  standard 
is  so  uncertain  and  elastic  that  it  may  include  profits  when  they  can 
be  earned,  and  must  exclude  them  when  they  cannot  be,  it  is  evident 
that  it  cannot  be  a  standard  of  general  or  just  application.  It  is  im- 
possible that  anj'thing  can  be  a  governing  principle,  which,  in  the  na- 
ture of  things,  cannot  have  the  same  meaning  to  the  several  parties 
who  are  to  be  affected  by  its  application. 

That  the  cost  to  the  roads  themselves  of  moving  their  freights,  irre- 
spective of  profits  to  shareholders,  has  much  to  do  in  determining  the 
charges,  is  we  think,  unquestionable.  It  certainly  must  have  infiuence 
so  long  as  competition  between  lines  exists,  for  the  most  economical 
line  may  fix  rates  on  a  consideration  of  what  its  favorable  circumstances 
will  enable  it  to  endure,  and  all  others  nuist  accept  them  whether  they 
prove  satisfactory  or  otherwise.  One  cheap  line  may  thus  give  to  a 
town  the  benefits  of  cheap  transportation,  not  as  an  application  of  the 
cost  principle,  but  because  its  favorable  circumstances  enable  it  to  do 
so  consistent  with  its  own  interests. 

The  idea  was  not  put  forward  in  any  of  the  arguments  that  the  ap- 
plication of  the  cost  principle  could  be  made  universal,  and  that  every 
railroad  company  should  apply  it  in  its  own  business  as  between  the 
different  kinds  and  classes  of  freight.  The  difficulty  in  doing  this  as 
a  mere  matter  of  accounting  would  be  very  serious ;  but  there  would 
be  other  difficulties  which  would  be  more  important  to  the  general 
public.  The  chief  of  these  would  be  this  that  very  many  articles  would 
not  bear  transportation  for  the  very  considerable  distances  for  which 
they  are  now  carried,  if  the  charges  upon  them  were  graded  strictly 
by  the  cost.  If  their  bulk  or  weight  is  large  in  proportion  to  their 
value,  they  must  be  carried  cheaply  or  they  cannot  be  carried  at  all ; 
and  freights  are  therefore  classified  in  the  tariffs  so  that  the  lighter, 


[y2  ATLANTIC    PORT    DIFFERENTIALS 

but  more  valuable,  articles  are  made  to  bear  a  burden  out  of  propor- 
tion to  the  cost  of  carriage,  in  order  that  the  roads  which  carry  them 
may  be  enabled  at  the  same  time  to  serve  the  public  in  the  exchange 
of  articles  and  products  whose  value  will  not  admit  of  like  charges. 
Some  discriminations  of  this  sort  are  essential  to  enable  railroads  to 
answer  the  expectations  and  meet  the  needs  of  the  public.  It  must 
often  happen,  also,  that  where  two  or  more  roads  are  competing  for  a 
particular  business,  one  of  them  must  carry  what  it  gets  of  it  without 
profit,  and  must  find  its  profit  elsewhere.  If  the  competition  under 
such  circumstances  leads  to  the  road  carrying  one  kind  of  traffic  at  a 
loss,  which  is  made  up  by  an  increase  of  burdens  on  the  remainder,  a 
wrong  is  done  of  which  complaint  may  justly  be  made ;  but  there  is  no 
inherent  wrong  to  any  one  in  a  road  conveying  without  profit,  but  also 
without  loss,  a  business  which  it  must  accept  on  those  terms  or  decline 
altogether. 

THE  PRINCIPLE  OF  COMPETITION. 

If  neither  distance  nor  cost  gives  us  the  governing  principle,  we 
must  next  see  whether  we  are  to  find  it  in  competition.  In  nearly 
every  other  kind  of  business  the  competition  of  those  engaged  in  it  is 
the  great  regulator  of  charges,  and  the  operation  of  natural  and  fa- 
miliar laws  of  trade  prevents  extortion  and  brings  about  substantial 
uniformity.  Will  competition  do  this  in  the  business  of  transporting 
property  by  rail  ?  If  so,  is  not  the  competitive  principle  the  true  prin- 
ciple? And  will  not  the  competitive  principle  make  cost  and  distance 
elements  in  the  determination  of  rates,  and  allow  to  each  its  just  value, 
according  to  the  circumstances? 

We  should  be  glad  to  feel  able  to  give  to  these  questions  an  unhesi- 
tating answer  in  the  affirmative.  AVe  have  found,  however,  in  the 
course  of  our  investigations,  that  a  species  of  competition  has  prevailed 
from  time  to  time  which  has  brought  satisfaction  to  few  persons,  if 
any,  and  which  has  resulted  in  inequalities  and  disorders  greatly  detri- 
mental to  trade.  Such  competition  exists  when  the  railroad  companies, 
or  those  who  are  permitted  to  solicit  business  and  to  make  contracts  on 
their  behalf,  set  out  with  the  determination  to  withdraw  freights  from 
their  rivals,  and  secure  them  for  themselves,  at  all  hazards,  and  re- 
gardless of  gain  or  loss;  and  when  acting  upon  this  determination  they 
throw  to  the  winds  all  settled  rates,  and  in  the  desperate  strife  for 
business  offer  any  inducement  in  their  power  which  will  secure  it.  The 
country  not  long  since  had  experience  of  such  a  season,  and  everj^where 
we  listened  to  complaints  of  the  injury  which  legitimate  business  suf- 
fered from  it.     It  Avas  said  by  parties  interested  in  transportation  that 


REPORT    UPON    DIFFERENTIAL    RATES  93 

the  inauguration  of  such  a  strife  put  an  end  for  the  time  to  all  possi- 
bility of  calculating  from  day  to  day  what  would  be  the  cost  of  car- 
riage, and  what  could  be  safely  paid  or  wisely  accepted  for  gi'ain,  pro- 
visions, or  other  articles,  destined  to  another  market  by  rail.  The  con- 
trol of  railroad  rates,  and,  to  a  large  extent,  of  all  railroad  business, 
then  passed  out  of  the  hands  of  the  legitimate  and  regular  corporate 
managers  into  the  hands  of  solicitors  for  fast  freight  lines  and  other 
agents,  who  made  from  day  to  day,  and  from  hour  to  hour,  such  terms 
with  those  having  business  as  would  secure  it,  but  generally  made  secret 
terms — that  the  bargain  with  one  man  might  not  prevent  their  driving 
a  better  bargain  with  another,  as  they  might  find  opportunity.  Under 
such  circumstances  persons  were  favored  and  localities  were  favored, 
when  the  object  to  be  immediately  accomplished  seemed  to  require  it — 
regardless  of  the  just  maxims  of  legitimate  business,  and  of  the  rules 
of  the  common  law,  which  enjoin  upon  common  carriers  that  they  shall 
deal  with  all  customers  upon  principles  of  equity  and  relative  fairness. 
Legitimate  business,  it  was  said,  necessarily  passes  into  an  unsettled 
and  speculative  state  while  this  condition  of  things  exists;  safe  and 
close  calculations  are  impossible ;  transportation  becomes  cheap,  but 
neither  producer  nor  consumer  is  certain  to  reap  the  profit,  for  the  mid- 
dleman cannot  calculate  upon  steadiness  in  low  rates,  and  as  he  takes 
the  risk  of  their  being  raised  upon  him,  so  he  is  in  the  best  position  to 
appropriate  the  benefit  while  they  continue.  Meantime,  railroad 
profits  disappear,  and  dividends  cease  to  be  paid,  to  the  great  distress 
of  thousands  who  rely  upon  them  for  their  living ;  and  every  interest, 
in  any  degree  dependent  on  railroad  prosperity,  must  participate  in  the 
depression  and  disaster  which  accompanies  the  ownership  of  railroad 
shares. 

The  mere  statement  of  these  results  is  sufficient  to  show  that  this  is 
not  what  in  other  business  is  known  and  designated  as  competition. 
Competition  is  the  life  of  trade,  but  this  is  its  destruction ;  competition 
brings  health  and  vigor,  and  secures  equality  and  fairness,  but  this 
l>aralyzes  strength,  and  makes  contracts  a  matter  of  secrecy  and  double 
dealing.  In  competition,  the  sound  dealer,  operating  upon  his  own 
capital  and  upon  well  established  credit,  has  the  best  chance  of  success ; 
but  in  the  sort  of  competition  we  have  mentioned,  it  is  found  that  the 
bankrupt  corporation  has  the  advantage,  for  its  managers,  having 
nothing  to  lose,  may  offer  rates  which  solvent  roads  cannot  meet  with- 
out being  dragged  into  bankruptcy  with  them.  Railroad  managers  do 
not  concede  that  this  state  of  things  is  properly  designated  competi- 
tion, but  they  speak  of  it  as  an  unnatural  condition  of  railroad  hos- 
tility;  as  unreasoning  railroad  warfare;   as  competitive  strife,  rather 


9-1  ATLANTIC    PORT   DIFFERENTIALS 

than  competition.  It  is  a  state  of  things  that,  like  a  war  between  na- 
tions, from  its  very  destruetiveness,  cannot  be  a  normal  condition,  but 
must  speedily  terminate  in  peace  or  in  disaster.  It  has  usually  been 
terminated  by  some  common  understanding  between  railroad  managers 
npon  a  tariff  of  rates. 

But  this  common  understanding,  it  is  urged,  in  some  quarters,  elimi- 
nates competition  from  the  sphere  of  railroad  business,  and  we  escape 
the  evils  of  competitive  strife  by  embracing  those  of  monopoly.  This 
is  denied  by  railroad  managers,  who  insist  that  understandings  respect- 
ing the  reasonable  management  of  their  business  are  not  only  entirely 
consistent  with  competition,  but  that  the}"  are  the  only  means  whereby 
the  excessive  competition  at  soijie  points  can  be  prevented  from  operat- 
ing oppressively  at  others.  It  is  no  doubl  true  that  competition  tends 
to  produce  some  great  inequalities,  and  that  care  ought  to  be  taken  to 
prevent  this.  It  should  never  be  forgotten  that  the  transportation  of 
property  and  persons  by  railroad  is  not  exclusively  a  private  business, 
but  is  carried  on  under  franchises  granted  by  the  State,  which  confer 
upon  the  owners  functions  of  a  semi -public  nature,  and  charge  them 
with  certain  public  duties.  The  railroad  manager,  operating  under 
such  a  franchise,  must  harmonize  the  interest  of  his  road  with  the  pub- 
lic duty,  and  he  cannot  make  self-interest  the  exclusive  guide,  as  a 
merchant  may,  or  a  farmer.  One  of  the  chief  of  these  public  duties 
is  to  make  only  reasonable  charges,  and  to  regulate  and  apportion  these 
among  the  customers  of  the  road,  on  principles  of  equity  and  relative 
equality.  But  the  operation  of  competition  is  perpetually  in  conflict 
with  this  duty;  it  is  felt  unequally  along  railroad  lines;  it  will  be 
active  at  points  where  several  lines  can  compete;  it  will  be  moderate 
at  others  where  there  is  little  to  excite  it,  while  at  still  others  there  can 
be  no  competition,  because  there  is  but  a  single  road.  But  the  capital 
of  a  railroad  company  is  planted  on  a  certain  line ;  it  must  be  made 
available  to  its  owners  there  or  nowhere ;  it  cannot  be  removed  when 
found  unprofitable,  as  a  merchant  may  remove  his  stock  of  goods ;  an<l 
the  tendency  of  excessive  competition  is  to  cast  upon  the  business  of 
non-competing  points  a  cost  for  transportation  which  puts  them  to 
great  relative  disadvantage,  and  in  extreme  cases  may  prove  ruinous. 
The  local  traffic  is  likely  to  experience  this  result  most  severely,  and 
the  more  completely  any  particular  line  occupies  a  territory,  the  more 
is  the  local  traffic  exposed  to  peril.  The  New  York  Central  Railroad 
with  no  connections  west  of  Buffalo,  would  be  a  mere  local  road,  and 
must  find  remunerative  returns  upon  all  its  immense  investments  from 
the  local  business ;  as  a  great  through  line,  it  is  enabled  to  cast  upon 
through  traffic  a  part  of  the  burden  which  local  traffic  must  otherwise 


REPORT    UPON    DIFFERENTIAL    RATES  95 

bear;  but  if  under  the  stress  of  unreasonable  and  excessive  strife  for 
through  freights  that  class  of  freights  is  carried  at  a  loss,  this  loss  nuist 
either  fall  upon  the  corporate  sliareholders,  or  it  must  be  cast  by  the 
corporation  upon  the  shippers  of  local  freights.  It  must  be  assumed 
that  railroad  boards  will  always  seek  to  so  arrange  tlicir  tariffs  of  rates 
as  to  secure  a  satisfactory  net  profit ;  and  if  a  part  of  tlie  business  pays 
too  little,  the  remainder  may  be  made  to  pay  too  much.  Tliis  is  not  a 
beneficial  result  of  competition,  or  one  consistent  with  tbe  oliligatious 
of  the  railroad  companies  to  the  public.  No  one  disputes  or  doubts 
that  for  the  general  public  the  business  of  transportation  by  rail  is  in 
the  most  desirable  state  when  it  is  so  conducted  that  the  charges  for 
moving  property  are  distributed  with  relative  equality  over  all  the 
business,  so  that  a  moderate  profit  may  be  reaped  from  all.  and  the 
support  of  the  road,  and  profits  to  its  owners,  not  be  exacted  wholly 
or  mainly  from  one  portion  of  the  business  to  the  exemption  of  the  re- 
mainder. But  it  is  only  when  it  is  in  that  state  that  railroad  com- 
jianies  are  complying  with  their  conunon  law  obligation  as  carriers. 
If  they  are  sacrificing  the  interests  of  one  class  of  shippers  in  the  reck- 
less strife  to  obtain  the  business  of  another,  it  is  plain  that  they  cannot 
be  dealing  impartially  or  making  charges  which  are  relatively  just. 
And  certainly  no  city  can  be  interested  in  having  the  trade  which  is 
nearest  to  it,  and  which  is  the  trade  of  the  people  constituting  its  best 
and  largest  customers,  sacrificed  to  the  trade  with  the  people  at  a  dis- 
tance, who  deal  with  it  much  less. 

It  is  a  fact  of  which  the  railroad  companies  are  entitled  to  the  full 
benefit,  that  the  charges  for  railroad  service  have  steadily  declined, 
even  when  the  railroads  have  been  so  conducted  as  to  avoid  competi- 
tive strife.  Mr.  Poor,  in  his  summary  of  railroad  operations  for  the 
year  1881,  prepared  for  his  Manual,  gives  some  striking  figures  on  the 
subject  of  rates,  and  shows  that  within  a  quarter  of  a  century  the  aver- 
age charges  for  the  transportation  of  property  on  three  of  the  great 
railroad  lines  of  the  country  have  been  reduced  more  than  seventy  per 
cent.,  and  that  the  reduction  has  continued  to  go  on  until  the  present 
day.*     Some  of  the  reasons  for  the  reduction  are  traceable  to  competi- 


*"  The  internal  commerce  of  the  coimtrv,  in  all  its  vast  masriiitnde,  is  a  direct 
creation  of  our  railroads,  through  the  reduction  tliey  have  effected  in  the  cost  of 
transportation.  A  good  example  of  their  method,  and  of  its  results,  is  afforded  by 
the  operations  of  the  New  York  Central  &  Hudson  Eiver  "Railroad.  In  IS.5.5,  im- 
mediately after  its  consolidation,  this  road  moved  670,073  tons  of  freight  at  a  charge 
of  $3,758,320,  and  at  a  cost  of  $1,539,912;  the  net  being  $2,215,408.  The  tons 
moved  one  mile  equalled  114,827,793;  the  charge  was  3.270  cents;  the  cost,  1.341 
cents;    the  net,  1.929  cents  per  ton  per  mile. 

"In  1881  the  same  road  moved  11,591,379  tons  of  freight  at  a  cliarge  of  $20,- 
735,750,  and  ^t  3  COSt  of  $14,913,213;    the  net  being  $5,823,537.     The  number  of 


96  ATLANTIC    PORT   DIFFERENTIALS 

tion  and  some  not.  The  growth  of  railroad  business  has  kept  pace  with 
the  reduction  of  the  charges  upon  transportation,  and  the  two  have 
acted  and  reacted  upon  each  other  as  cause  and  effect.  When  the  mer- 
chandise or  products  of  one  section  of  the  country,  for  which  there  was 
a  demand  in  another,  would  not  bear  transportation  at  existing  rates, 
the  railroads  have  been  compelled  to  reduce  the  rates  as  a  necessary 
condition  to  obtaining  the  property  for  carriage;  and  the  reductions 
which  are  made  in  some  cases  from  necessity  are  made  in  others  from 
policy,  because  it  is  found  that  they  stimulate  industry,  build  up  manu- 
factures, and  bring  profits  to  the  railroad  companies  in  the  great  in- 
crease of  business  which  is  thereby  prepared  for  them.  In  all  these 
cases  the  common  interest  of  railroad  companies  recpiires  that  they 
should  yield  to  any  public  demand  for  the  reduction  of  rates  so  long 
and  so  rapidly  as  they  tind  they  can  do  so  with  justice  to  their  share- 
holders ;  and  they  have  generally  found  that  the  net  results  were  such 
as  from  a  selfish  standpoint  would  fully  justify  the  reductions.  Com- 
mon understandings  between  railroad  companies  in  many  such  cases 


tons  moved  one  mile  equalled  2,646,814,098;    the  charge  was  .780  cents;    the  cost, 
.562  cents;    the  net,  .218  cents  per  ton  per  mile. 

"At  the  rate  of  18.5.5,  the  charge  for  moving  a  ton  of  ivheat  from  Chicago  to 
New  York,  a  distance  of  960  miles,  was  $31. .39;  in  1881,  $7.51.  The  actual  charge 
lor  the  latter  year  for  this  kind  of  freight  did  not  probably  exceed  $4  the  ton — the 
charge  for  freight  in  bulk  on  the  long  haul  being  much  below  the  general  average. 
It  is  certain  that  each  year  the  railroad  charged  the  freight  traffic  over  it  all  it 
would  bear.  It  had  to  meet  a  most  vigorous  competition  from  every  cjuarter.  It 
had  to  meet  the  exigency  of  the  farmers  of  the  extreme  West,  so  that  the  wheat 
grower,  tirst  on  the  Missifsippi  Eiver  and  then  the  Missouri,  nearly  2,000  miles 
in  the  interior,  could  send,  at  remunerative  rates,  his  produce  to  market,  foreign  as 
well  as  domestic.  Charges  for  transportation  had  to  be,  as  they  always  must  be, 
in  inverse  ratio  to  distance,  or  a  limit  would  soon  be  reached  beyond  which  freight, 
from  excessive  cost,  could  not  be  moved.  It  is  with  railroads  as  with  all  other  kinds 
of  business,  the  charges  and  jirices  must  be  so  graduated  as  to  allow  a  profit  on 
both  sides,  and  they  will  always  be  so  graduated.  Charges  have  been  reduced  to 
rates  that  were  believed  to  be  impossible  a  few  years  ago.  In  1872  it  cost  the 
New  York  Central  1.129  cents  to  move  a  ton  of  freight  one  mile.  In  1881  it  received 
only  .783  cents  for  a  similar  service,  or  .346  cents  less  than  the  cost  ten  years  be- 
fore. Such  is  the  history  of  railroad  transportation,  and  such  the  methods  by  which 
the  enormous  tonnage,  and  with  it  the  internal  commerce  of  the  country,  now  so 
colossal  in  its  proportions,  has  been  created.  In  its  reduction  of  charges  the  Cen- 
tral Eailroad  only  rejiresents  the  entire  system  of  the  country.  The  New  York, 
Lake  Erie  &  Western  Railroad,  in  1855,  moved  842,055  tons  of  freight  at  a  charge 
of  2.424  cents,  and  at  a  cost  of  1.155  cents  per  ton  per  mile.  In  1881  it  moved 
11,086,823  tons  at  a  charge  of  .805  cents  and  at  a  cost  of  .529  cents  per  ton  per  mile. 
Had  it  charged  as  much  per  mile  in  1881  as  it  did  in  185.5,  its  receipts  from  freight 
would  have  been  .$47,101,811,  in  place  of  $5,473,313,  the  amount  actually  received. 
The  Pennsylvania  Railroad  moved,  in  1855,  365,006  tons  of  freight  at  a  charge  of 
2.746  cents,  and  at  a  cost  of  1.662  cents  per  ton  per  mile.  In  1881  it  moved  18, 
229,365  tons  at  a  charge  of  .799  cents,  and  at  a  cost  of  .437  cents  per  ton  per  mile. 
Had  it  charged  the  same  rates  in  1881  as  it  did  in  1855.  its  receipts  for  the  past 
year  would  have  been  $73,195,832,  in  place  of  $10,801,089,  the  amount  actually 
rec^eived.  The  charge  in  1881  was  .87  cents  less  than  the  cost  of  movement  in 
1872.  The  result  of  reduced  charges  is  seen  in  the  enormous  increase  of  freight 
and  of  income — quantity  making  up  for  reduced  rate  of  profits. ' ' 


REPORT    UPON   DIFFERENTIAL    RATES  97 

might  tend  to  equalize  and  steady  the  rates,  but  would  be  grossly  im- 
politic and  unreasonable  if  they  were  directed  to  the  maintenance  of 
such  freight  charges  as  would  operate  as  a  check  upon  transportation, 
and  thereby  reduce  their  own  net  revenues. 

But  there  are  influences  bearing  upon  the  charges  for  the  transpor- 
tation of  property  which  are  bej'ond  the  reach  of  tlie  railroad  com- 
panies altogether,  and  which  no  combination  among  them  can  coiitrol. 
The  transportation  of  the  products  and  merchandise  which  the  differ- 
ent sections  of  the  country  exchange  with  each  otlier  is  only  in  part  in 
railroad  hands,  and  the  carriers  by  rail  are  at  all  times  subjected  to  a 
competition  which  is  not  only  active  and  vigilant,  but  is  possessed  of 
some  most  important  advantages.  It  will  readily  be  inferred  that  we 
allude  here  to  the  carriers  by  water.  For  the  whole  distance  from 
Chicago  to  New  York  the  owners  of  boats  on  lake  and  canal  are  bidding 
against  the  railroads  frir  freights.  ]\Iuch  of  the  time  they  are  offering 
rates  which  the  railroads  cannot  meet  without  loss,  and  during  the 
season  of  water  carriage  they  would  take  away  from  the  railroads 
nearly  all  the  heavy  freights,  if  it  were  not  that  the  more  rapid  transit 
by  rail  has  some  advantages  of  which  shippers  find  it  for  their  interest 
in  many  cases  to  avail  themselves.  But  even  with  these  advantages 
the  railroads  find  themselves  compelled  to  make  their  charges  approxi- 
mate the  charges  of  carriage  by  water,  or  the  great  bulk  of  heavy 
freight  will  inevitably  take  the  water  route.  Thus  the  competition  by 
water  operates  in  reduction  of  railroad  tariffs,  and  no  understanding 
among  railroad  managers  can  prevent  it.  When  the  Erie  Canal  is 
closed  for  the  winter  the  railroad  companies  are  enabled  to  advance 
their  charges;  but  even  in  the  winter  they  feel  the  competition  of  the 
water  route;  for  excessive  charges  will  not  be  paid,  but  grain,  flour, 
provisions  and  other  heavy  articles,  instead  of  going  forward  by  rail 
at  what  seems  to  shippers  extortionate  rates,  will  be  placed  in  store 
until  the  water  route  is  again  open.  Nor  is  the  competition  with  the 
water  route  felt  exclusively  by  the  roads  to  New  York ;  for  unless  the 
seaports  to  the  south  afford  better  markets  for  western  products  than  is 
found  at  New  York,  which  they  seldom  or  never  do,  the  roads  leading 
to  them  will  be  cut  off  from  carrying  these  products  if  their  charges 
are  made  to  exceed  the  charges  to  New  York.  The  favorable  influence 
of  the  water  route  upon  rates  is  therefore  felt  all  the  way  to  the  Ohio 
and  the  Potomac,  and  the  maximum  of  rates  is  fixed  for  all  the  roads 
by  the  roads  to  New  York,  with  which  the  water  route  comes  most  di- 
rectly and  immediately  into  competition. 

Under  the  competitive  principle,  a  maximum  of  rates  is  thus  estab- 
lished, and  the  railroad  companies  cannot  prevent  it,  whatever  may  be 

7 


98  ATLANTIC    PORT    DIFFERENTIALS 

their  desire.  But  distance,  cost  and  many  other  circumstances  may 
then  come  in  to  force  still  lower  rates  on  the  lines  to  the  cities  south  of 
New  York.  If  it  is  found  that  the  roads  leading  to  Baltimore  will  not 
obtain  a  reasonable  share  in  the  business  without  offering  better  rates 
than  are  given  to  New  York,  such  rates  will  certainly  be  offered.  They 
will  submit  to  the  rates  which  give  the  business  to  other  cities  only 
until  the  trial  proves  the  prejudicial  operation.  And  when  they  re- 
duce their  charges  it  will  be  optional  to  the  New  York  roads  to  follow 
the  Baltimore  lead,  and  they  may  no  doubt  be  relied  upon  to  do  so  if 
their  interests  appear  to  require  it. 

But  another  most  important  factor  in  regulating  freight  charges  is 
the  export  trade. 

The  prices  of  the  leading  American  products,  in  the  carriage  of  which 
the  railroads  compete  most  actively,  are  fixed  in  European  markets. 
These  i)roducts  should  net  to  the  producer  in  the  American  market  the 
foreign  price,  less  reasonable  charges  for  transportation  and  handling; 
and  he  is  interested  in  having  the  trade  open  to  the  competition  of  as 
many  buyers,  and  the  transportation  to  that  of  as  many  carriers  as 
possible.  Of  the  Atlantic  cities  which  compete  for  this  trade  Baltimore 
and  Philadelphia  are  nearest  to  the  producer,  but  New  York  and  Bos- 
ton are  nearest  to  the  foreign  market.  Much  is  shipped  to  each  of 
these  cities  for  home  consumption,  but  the  major  part  of  all  that  they 
receive  is  destined  to  a  foreign  market.  Some  of  it  passes  from  West- 
ern towns  on  through  bills  of  lading  to  foreign  ports,  but  the  most  of 
it  is  consigned  to  the  merchants  of  the  Atlantic  cities,  and  is  reshipped 
by  them.  Except  at  Boston,  it  has  been  found  impracticable  to  dis- 
tinguish between  that  intended  for  home  consumption  and  that  for 
foreign  shipment;  and,  therefore,  no  discrimination  in  freight  charges 
is  attempted,  but  all  is  charged  as  if  destined  to  a  foreign  market.  But 
v.'hen  so  treated,  the  Atlantic  cities  become  merely  so  many  points  on 
so  many  through  routes  between  the  interior  of  the  country  and  the 
European  ports,  and  the  charges  on  shipments  must  regard  the  whole 
lines  and  not  parts  of  them  merely.  On  these  several  through  lines, 
competing  for  the  same  business  between  the  same  interior  American 
towns  and  the  foreign  ports,  the  whole  charges,  if  the  routes  are  equally 
favorable,  must  be  substantially  the  same,  or  the  one  giving  the  best 
rates  would  obtain  the  business.  The  question  of  ocean  rates  must, 
therefore,  have  an  important  bearing  on  the  inland  rates ;  for  if  the 
ocean  rates  are  greater  from  Baltimore  to  foreign  ports  than  from  New 
York  to  the  same  ports,  the  inland  rates  to  Baltimore  must  necessarily 
be  lower,  or  Baltimore  will  be  excluded  from  the  trade.  Turning  our 
attention,  then,  to  the  ocean  freights,  we  find  that  during  the  year 


REPORT    UPON    DIFFERENTIAL   RATES  99 

]881,  from  Baltimore  to  Liverpool  by  steam' and  sail,  they  averaged 
nearly  three  cents  per  hundred  pounds  greater  than  from  New  York, 
and  from  Philadelphia  nearly  two  cents  greater.  This  is  not  conclu- 
sive of  what  they  might  be  in  another  year,  but  it  is  indicative  of  a 
general  condition  of  things.  Besides  this  advantage  in  the  ocean 
freights  the  New  York  route  has  a  further  advantage  in  the  some- 
what greater  expedition.  If,  therefore,  the  railroads  to  Baltimore  and 
Philadelphia  were  to  charge  for  the  inland  carriage  the  same  that  is 
charged  to  New  York,  thej^  must  do  so  wnth  the  certain  result  of  losing 
their  present  participation  in  the  export  trade.  They  must,  therefore, 
of  necessity,  make  their  average  inland  rates  at  least  as  much  lower 
than  the  inland  rates  to  New  York  as  will  offset  the  differences  in  the 
ocean  freights.  This  follows  under  the  sway  of  competition  from  the 
same  necessity  which  forces  upon  two  merchants  trading  side  by  side  in 
the  same  articles  a  concurrence  in  the  same  prices.  Attempts  by  agree- 
ment or  otherwise  to  counteract  this  law  of  competition  would  be  of 
little  avail,  and  of  no  avail  whatever  for  any  great  length  of  time.  All 
the  leading  articles  of  eastern  bound  freight  would  be  affected  by  this 
principle,  and  this  would  be  so  large  a  proportion  of  the  whole  as  to 
govern  the  charges  on  all. 

The  differentials  then  appear  to  us  to  find  their  reason  in  competitive 
forces.  A  brief  reference  to  their  history  will  show  that  compact  has 
not  succeeded  in  controlling  them.  In  1869  there  was  an  agreed  dif- 
ference in  favor  of  Baltimore  in  the  rates  for  the  transportation  of 
grain,  of  ten  cents  per  hundred  pounds.  But  the  effort  to  sustain  this 
difference  led  to  a  war  of  rates,  as  a  result  of  which  it  was  reduced  one- 
half.  This  lesser  difference  was  maintained  until  1876,  when  an  agree- 
ment was  entered  into  by  the  Trunk  Line  roads  which  based  the  rates 
on  relative  distances.  But  at  the  end  of  a  month  and  a  half  the  New 
York  roads  withdrew  from  this  agreement,  being  satisfied  that  its 
operation  was  prejudicial  to  their  interests.  Then  followed  another 
war  of  rates,  ending  after  a  long  struggle  in  the  differentials  now  exist- 
ing. The  war  of  rates  of  1880  was  entered  into  to  get  rid  of  them,  but 
'.t  proved  ineffectual,  as  before  stated.  They  appear,  therefore,  to 
abide  the  tests  of  competition,  and  they  have  come,  as  prices  generally 
do,  under  the  exigencies  of  trade. 

But  it  is,  of  course,  possible  that  differentials  may  be  just  at  one  time 
and  unjust  at  another ;  and  it  is  insisted  on  behalf  of  New  York  that, 
whatever  may  have  been  the  case  heretofore,  the  existing  differentials 
are  no  longer  just  to  that  city,  and  are  no  longer  such  as  would  result 
from  a  com.petition  not  hampered  and  restrained  by  railroad  combina- 
tions.    For  evidence  of  the  injustice,  we  are  referred  to  statistics, 


100  ATLANTIC    PORT   DIFFERENTIALS 

which  show  that  the  growth  of  Baltimore  and  Philadelphia  trade,  espe- 
cially in  grain  and  provisions,  has  in  late  years  gained  rapidly  on  that 
of  New  York.  This,  it  is  said,  is  proof  that  the  differentials  operate 
against  New  York  interests,  and  the  New  York  roads  ought  to  abolish 
them  by  reducing  their  own  rates  until  they  conform  to  the  rates  on 
the  lines  leading  to  Baltimore  and  Philadelphia.  This,  it  is  insisted,  is 
what  fair  competition  requires. 

It  might,  perhaps,  be  a  sufficient  answer  to  this  demand,  that  the 
attempts  heretofore  made  to  force  equality  of  charges,  though  long 
persisted  in,  with  no  small  loss  to  the  participants,  proved  unavailing. 
But  passing  that  fact  without  further  remark,  we  direct  our  attention 
to  the  evidences  that  New  York  has  suffered  from  the  differentials. 
These  we  have  not  found  of  much  weight.  It  is  certainly  true  that 
Baltimore  and  Philadelphia  have  now  a  larger  share  in  the  grain  and 
provision  traffic  than  they  had  fifteen  years  ago;  but  it  remains  to 
connect  the  fact  with  the  existence  of  the  differentials.  For  a  long 
time  New  York  nearly  monopolized  that  trade;  but  the  reasons  were 
obvious  in  its  better  channels  of  communication  with  the  interior,  and 
its  greater  preparations  to  accommodate  it.  When  Baltimore  and 
Philadelphia  had  extended  their  railroad  systems,  so  as  to  compete  for 
the  trade,  and  had  provided  elevators  and  other  conveniences,  they  im- 
mediately took  a  share  in  the  business ;  not  because  of  the  differentials, 
but  because  they  were  then  prepared  for  it.  But  no  evidences  were 
produced  before  us  that  the  Philadelphia  and  Baltimore  business,  to 
v.'hich  the  differentials  are  applicable,  is  now  increasing  more  rapidly 
in  proportion  than  that  of  New  York,  or  that  the  growth  of  New  York 
business  is  to  any  extent  checked  by  them.  On  the  contrary,  there  is 
abundant  evidence  that  New  York  is  fully  maintaining  its  present 
lead,  and  that  its  trade  is  enjoying  a  growth  so  healthy  and  vigorous, 
that  its  commercial  classes  can  well  afford  to  regard,  without  envy  or 
regret,  the  prosperity  of  other  places,  and  may  well  concede  to  them, 
Avithout  repining,  all  the  advantages  which  have  come  to  them  as  a 
result  of  competitive  efforts.  The  accompanying  note  will  show  the 
relative  proportion  of  the  total  receipts  of  grain  and  flour  at  the  four 
Atlantic  ports  which  was  received  at  each,  and  it  will  appear  from  the 
figures,  that  New  York,  during  the  last  eighteen  months,  has  gained  on 
the  others.*    How  far  ephemeral  causes  have  contributed  to  this  gain 

1878.  1879.  1880.  1881.  6  mo.  1882. 

*New  York   56.  52.6  53.5  56.5  62.9 

Boston 10.  10.6  11.7  14.3  16.8 

Philadelphia 16.7  15.3  15.6  11.7  11.6 

Baltimore 17.3  21.5  19.2  17.5  8.7 

100.  100.  100.  100.  100. 


REPORT    UPON    DIFFERENTIAL    RATES  101 

we  cannot  know,  but  it  is  manifest  that  the  evidence  that  New  York 
suffers  from  the  differentials  does  not  yet  appear. 

As  the  interior  is  interested  in  the  subject  of  differential  rates,  and 
as  the  sharpest  competition  in  freights  is  encountered  there,  so  that  its 
commercial  classes  are  in  favorable  position  to  judge  of  the  forces 
affecting  them,  it  has  seemed  to  us  no  weak  evidence  of  the  justice  and 
necessity  of  the  differentials  that  the  preponderating  sentiment  in  the 
interior  was  strong  and  decided  that  the  differentials  were  just.  There 
was,  indeed,  some  dissent,  but  this  was  the  prevailing  view. 

In  our  discussion  thus  far,  we  have  had  but  little  to  say  of  the  case 
of  Boston,  or  of  the  westward  bound  freights.  As  to  the  latter,  some 
of  the  considerations  above  mentioned  would  not  apply,  but  the  dif- 
ferences are  not  sufficient,  as  we  think,  to  relieve  New  York  westward 
bound  freights  from  the  differentials.  We  were  not  invited  by  the 
commercial  organizations  of  Boston  to  visit  that  city,  and  we  refrained 
for  that  reason  from  doing  so.  We  have  reason  to  suppose  that  the  seem- 
ing want  of  interest  in  Boston  in  the  subject  referred  to  us  was  due  to 
the  fact,  that  no  one  seemed  disposed  to  make  any  controversy  in  re- 
spect to  the  rates  to  that  city.  Boston  claims  the  same  rates  with  New 
York  on  the  export  trade,  and  the  other  cities  do  not  appear  inclined 
to  contest  the  claim.  This  makes  the  charges  less  on  foreign  bound 
freights  than  upon  those  delivered  in  Boston  and  other  New  England 
towns  for  home  consumption ;  and  to  that  extent  works  an  apparent 
injustice.  If  the  low  charges  on  foreign  bound  goods  have  the  effect  to 
increase  the  charges  on  freights  for  home  consumption,  it  is  an  injustice 
in  fact ;  but  if  not,  and  the  Boston  roads  consent  to  carry  at  the  low" 
rates  as  a  necessary  condition  to  participation  in  the  foreign  trade, 
the  other  cities  cannot  well  contest  their  right  to  do  so.  As  the  ocean 
freights  from  Boston  correspond  very  closely  to  those  from  New  York, 
the  principle  already  stated  is  applicable;  and  we  have  no  occMsion  co 
consider  the  case  of  Boston  separately. 

CONCLUSION. 

It  only  remains  for  us  to  state  that  no  evidence  has  been  offered 
before  us  that  the  existing  differentials  are  unjust,  or  that  they  operate 
to  the  prejudice  of  either  of  the  Atlantic  seaport  cities.  Differential 
rates  have  come  into  existence  under  the  operation  of  competitive 
forces;  they  bear  some  relation  to  relative  distance  and  relative  cost 
of  service;  they  recognize  as  we  think  the  relative  advantages  of  the 
several  seaports ;  and  they  are  subordinate  to  the  great  principle  which 
compels  the  carriers  of  property  competing  between  the  same  points 
and  offering  equal  facilities  to  their  customers,  to  make  the  same  rates. 
We  therefore  cannot  advise  their  being  disturbed. 


102  ATLANTIC    PORT   DIFFERENTIALS 

But  we  do  not  assume  that  the  rates  which  are  just  to-day  will  be 
just  indefinitely.  They  have  become  established  by  the  force  of  cir- 
cumstances, and  they  ought  to  give  way  if  future  circumstances  shall  be 
such  as  to  render  it  right  and  proper.  They  constitute  a  temporary 
arrangement  only ;  equitable,  as  we  think,  for  the  present,  but  which 
may  become  inequitable  before  the  lapse  of  any  considerable  time. 
Whenever  they  shall  be  found  to  operate  unfairly,  and  to  give  a  force 
or  unnatural  direction  to  trade,  and  whenever  it  shall  appear  that  they 
tend  to  deprive  any  one  of  the  seaports  affected  by  them  of  the  pro- 
portion of  business  that  would  naturally  come  to  it  under  the  operation 
of  normal  competition,  the  want  of  equity  in  the  rates  will  appear,  and 
it  will  be  right  to  modify,  or,  perhaps,  abolish  them, 

Kailroad  problems  assume  such  different  phases  from  year  to  year, 
and  almost  from  day  to  day,  that  those  who  have  authority  in  railroad 
matters  may  justly  be  expected  and  required  to  give  their  earnest  at- 
tention and  best  efforts  to  making  their  franchises  accomplish  the 
great  ends  of  equal,  fair,  prompt  and  beneficial  accommodation  which 
was  intended  in  their  grant.  And  those  ends  they  should  have  in  view 
in  determining  upon  the  continued  existence  of  differential  rates. 
Their  observation  of  the  general  course  of  traffic  from  day  to  day  and 
from  month  to  month  ought  to  enable  them  to  determine  whether  the 
differentials  are  too  large  or  too  small ;  whether  they  are  influencing 
trade  unfairly  and  unnaturally ;  and  whether  they  operate  as  an  im. 
proper  restraint  upon  competition ;  and  when  the  improper  effect  is 
discovered,  they  ought  to  correct  the  wrong  without  hesitation  or  delay. 
To  enable  them  to  judge  fairly  and  with  full  understanding,  accurate 
statistics  of  their  business  should  be  kept  hy  each  of  them,  and  sub- 
iiiitted  to  the  others  or  kept  in  some  common  office ;  and  these  statistics 
ought  to  be  periodically  given  to  the  public  also.  Publicity  is  a  great 
corrector  of  imaginary  evils,  and  may  be  an  important  preventive  of 
evils,  both  imaginary  and  real. 

We  do  not  assume  or  believe  that  there  exists  in  railroad  official 
circles  any  legitimate  authority  to  determine  the  question  of  rates 
arbitrarily.  Large  powers  of  self-government  have,  undoubtedly,  been 
left  by  the  law  in  railroad  managers,  but  all  their  authority  is  quali- 
fied by  duty  to  the  public ;  and  it  cannot  be  too  often  or  too  pointedly 
asserted  that  the  obligation  on  their  part  to  serve  the  public  wuth  rela- 
tive fairness  is  of  perpetual  force.  In  their  future  dealings  with  the 
important  question  which  has  been  the  occasion  for  our  coming  togeth- 
er, the  great  Trunk  Lines  should  be  particularly  careful  to  give  no  oc- 
casion for  just  complaint,  that  they  subject  any  one  of  the  seaboard 
cities  to  the  operation  of  arbitrary  or  unfair  regulations  or  charges, 


REPORT    UPON    DIFFERENTIAL    RATES  103 

cr  that  they  fail  to  observe  towards  any  one  of  them,  or  towards  the 
people  trading  or  desiring  to  trade  with  them,  the  mandate  of  the  com- 
mon law — to  deal  justly  and  distribute  fairly  the  benefits  and  burdens 
which  are  incident  to  their  occupation. 

Allen  G.  Thurman, 
E.  B.  Wastiburne, 
Thomas  M.  Cooley. 
New  York,  July  20, 1882. 


IN  THE  MATTER  OF  THE  EXPORT  TRADE  OF  BOSTON. 

I  I.  C.  C.  24. 


iU5 


IN  THE  MATTER  OF  THE  EXPORT  TRADE  OP  BOSTON. 

Decided  April  23,  1887. 
(II.  C.  C.  24.) 

1.  It  seems  not  to  be  illegal  for  railroad  companies  connecting  Boston 

with  western  points  to  make  the  rates  from  such  points  to  Boston 
upon  grain  and  provisions  for  export  as  low  as  the  rates  to  New 
York,  although  the  rates  upon  like  property  for  local  consumption 
are  higher  to  Boston  than  to  New  York,  the  distance  being  some- 
what greater. 

2.  Reasons  given  wliy  this  may  be  a  necessity  of  the  situation. 

REPORT   OF   THE   COMMISSION. 

CooLE Y,  Chairman : 

Several  petitions  regarding  this  trade  are  before  us:  One  from  the 
Fitchburg  Railroad  Company,  and  others  from  the  Boston  and  Lowell, 
the  New  York  and  New  England,  the  Central  Vermont  line,  and  the 
Boston  and  Albany  railroad  companies.  All  seek  the  same  relief,  and 
upon  a  state  of  facts,  which  may  be  sunnnarized  as  follows : 

For  many  years  it  has  been  the  practice  of  the  railroad  companies 
connecting  Boston  with  western  points,  to  make  the  rates  from  such 
points  to  Boston,  upon  grain  and  provisions  for  export,  as  low  as  the 
rates  to  New  York,  although  the  rates  upon  property  for  local  con- 
sumption have  during  the  same  time  been  higher  to  Boston  than  to 
New  York,  the  distance  being  somewhat  greater.  The  rates  to  the 
seaboard  and  abroad,  it  w^as  shown,  are  in  effect  determined  by  the 
shortest  line  from  the  interior,  which  for  this  purpose  is  the  Pennsyl- 
vania line ;  the  other  lines  conforming  substantially  to  those  rates 
as  a  security  to  participation  in  the  traffic. 

The  equalization  of  rates  upon  the  export  business  has  sometimes 
been  made  by  way-billing  to  Boston  at  New  York  rates,  but  as  this  is 
not  always  practicable  it  has  more  commonly  been  made  by  paying  a 
rebate  equal  to  the  difference  between  Boston  and  New  York  rates. 

Making  the  allowance  in  some  form  has  been  essential  to  the  exist- 
ence of  the  trade,  since  the  ocean  rates  from  Boston  and  New  York  are 
not  materially  different,  and  higher  interior  rates  would  exclude  Bos- 
ton altogether  from  participation  in  the  foreign  trade. 

[25]  The  practice  which  allows  the  rebate  has,  therefore,  been 
adopted  in  a  spirit  of  fairness  to  Boston  and  as  a  convenient  method 

107 


108  ATLANTIC    PORT   DIFFERENTIALS 

I'or  equalizing  the  rates  from  western  points  to  the  foreign  market, 
wliether  the  route  chosen  by  the  shipper  for  his  traffic  be  by  way  of 
Boston  or  of  New  York. 

The  petition  of  the  Fitchburg  Railroad  Company  states  that  "the 
New  England  railroads  have  been  advised  by  the  unanimous  opinion 
of  the  counsel  consulted  by  them  that  this  practice  was  not  illegal 
under  the  interstate  commerce  bill  inasmuch  as  the  terras  are  available 
for  all  engaged  in  the  like  and  contemporaneous  transportation  of 
such  traffic  under  similar  circumstances  and  conditions,  and  being 
equal  to  those  by  New  York  are  neither  unjust  nor  unreasonable.  This 
commercial  usage  has  in  fact  been  looked  upon  as  a  vested  right  of  this 
port  (Boston)  and  upon  the  faith  of  its  continuance  vast  sums  have 
been  expended  to  accommodate  and  permanently  continue  the  export 
business.  Unfortunately,  however,  adverse  legal  opinions  have  ap- 
parently been  rendered  by  the  advisers  of  the  trunk  lines,  whose  action, 
guided  thereby,  has  practically  stopped  the  practice,  and  has  seriously 
embarassed  the  Boston  export  business,  and  threatens  to  put  a  stop 
to  it,  to  the  great  detriment  of  this  road  and  the  business  interests  of 
Boston." 

The  prayer  of  the  petition  is  that  the  Commission  "authorize  the 
trunk  lines  to  bill  export  freight  to  Boston  at  New  York  rates,  or  take 
such  other  action  as  may  seem  best  in  order  that  this  business  may  be 
continued  upon  as  fair  and  favorable  a  basis  as  it  has  been  done  hither- 
to." 

The  other  petitions  are  not  essentially^  different.  A  hearing  was  had 
upon  all  together  and  evidence  was  taken  in  support  of  their  alle- 
gations of  fact.  A  party  interested  in  the  local  grain  and  provision 
trade  of  Boston  was  also  heard  in  favor  of  the  contention  that  any 
concessions  made  in  favor  of  the  export  trade  of  Boston  ought  in  fair- 
ness to  be  extended  to  all  other  persons  to  whom  grain  and  provisions 
may  be  consigned  at  that  city  from  interior  markets. 

It  was  shown  on  the  hearing  that  the  Boston  export  trade  was  for 
the  time  being  under  considerable  embarrassment  arising  from  a  doubt 
whether  the  railroad  companies  might  [26]  lawfully  continue  the  re- 
bate which  has  been  heretofore  allowed.  It  was  not  so  evident,  how- 
ever, that  the  Commission  had  the  power  to  give  relief.  Indeed  the 
petitioners  when  called  upon  to  point  out  the  provision  of  the  inter- 
state commerce  law  under  which  the  Commission  had  authority  to 
grant  the  relief  prayed,  frankly  confessed  that  there  was  difficulty  in 
doing  so.  It  was  stated,  however,  that  there  were  times  when  the 
rebate  exceeded  the  ocean  rates,  and  that  then  a  suspension  of  the  oper- 
ation of  the  fourth  section  of  the  act  would  be  necessary,  since  other- 


MATTER  OF  EXPORT  TRADE  OP  BOSTON  109 

wise  the  railroad  companies  would  be  liable  to  penalties  for  charging 
and  receiving  a  greater  sum  for  the  transportation  of  grain  and  pro- 
visions from  western  points  to  Boston  than  from  the  same  western 
points  through  Boston  to  the  foreign  market.  But  a  case  of  this  sort,  it 
was  conceded,  would  be  quite  exceptional,  so  that  a  suspension  of  the 
long  and  short  haul  clause  of  section  four  would  not  alone  give  the 
relief  required. 

What  the  companies  desire  is  authority  to  continue  payment  of  the 
rebate  as  well  when  it  falls  short  of  the  ocean  rates  as  when  it  exceeds  it. 

If  what  is  paid  under  the  name  of  a  rebate  were  a  rebate  in  fact,  as 
understood  in  the  second  section  of  the  interstate  commerce  law,  and  if 
the  effect  of  allowing  it  were  to  impose  upon  some  classes  of  persons  .a 
greater  charge  for  service  rendered  than  was  imposed  upon  others  for  a 
like  contemporaneous  service,  under  the  same  circumstances  and  condi- 
tions, and  so  effect  what  is  described  in  the  law  as  an  unjust  discrimina- 
tion, it  would  neither  be  legal  in  itself  nor  could  it  be  made  legal  by  any 
order,  assent,  or  permission  made  or  given  by  the  Commission.  But  as 
explained  by  the  petitions  and  the  evidence  adduced  in  their  support, 
the  rebate  has  for  its  purpose  to  correct  an  inequality  that  would  other- 
wise exist,  and  which,  by  making  the  cost  of  foreign  shipments  by  way 
of  Boston  greater  than  by  w^ay  of  New  York,  would  practically  exclude 
shippers  from  the  choice  of  the  Boston  route,  though  the  distance  from 
interior  points  to  the  foreign  market  would  be  practically  no  greater  by 
that  route  than  by  the  other.  This  alleged  necessity  for  the  equalization 
of  rates  on  export  traffic  is  [27]  relied  upon  as  the  justification  for  the 
higher  rate  which  is  imposed  on  the  traffic  whose  final  destination  is 
Boston,  which  higher  rate,  however,  is  averred  to  be  in  itself  just  and 
reasonable.  If  such  is  the  real  nature  of  the  so-called  rebate — if  its 
purpose  is  only  to  do  indirectly  what  might  directly  be  done  by  bill  of 
lading  issued  at  the  interior  point  of  shipment  for  the  delivery  of  the 
goods  at  the  foreign  destination,  and  if  no  discrimination  is  made  be- 
tween persons  engaged  in  the  foreign  traffic,  but  the  rebate  is  paid  im- 
partially, and  only  as  a  means  of  protecting  the  Boston  route  for  the 
export  trade  against  an  excess  in  charge  that  would  be  ruinous  to  it, 
then  it  is  obvious  there  is  no  occasion  for  calling  upon  the  Commission 
to  give  sanction  to  a  practice  which  would  be  legal  without  it.  Indeed 
any  legal  ground  for  affirmative  action  on  the  part  of  the  Commission 
is  precluded  when  those  who  bring  the  practice  to  its  attention  do  so 
with  explanations  of  its  propriety  and  insisting  upon  its  lawfulness. 

Whether  all  freights  from  interior  points  to  Boston  ought  to  be  car- 
ried at  rates  as  low  as  those  prevailing  from  the  same  points  to  New 
York,  is  a  question  not  legitimately  before  the  Commission  now. 


110  ATLANTIC    PORT   DIFFERENTIALS 

The  railroad  companies,  who  are  the  only  parties  asking  action  at  our 
liands,  justify  the  differences  now  made  on  the  ground  of  longer  haul, 
while  submitting  to  the  rebate  on  the  export  trade,  under  a  species  of 
compulsion.  If  the  exactions  from  the  Boston  traffic  proper  are  exces- 
sive, the  fact  can  only  be  adjudicated  when  somebody  questions  them  in 
a  proceeding  instituted  for  the  purpose  of  a  regular  investigation. 

It  follows  from  what  has  been  said  that  no  order  should  be  made  on 
the  petitions,  and  the  petitioners  have  leave  to  withdraw  them. 

Morrison,  Commissioner,  concurs  in  the  determination  to  make  no 
order  in  the  premises,  and  that  leave  be  given  to  withdraw  the  petitions. 


THE  BOSTON  CHAMBER  OF  COMMERCE 

V. 

THE  LAKE  SHORE  AND  MICHIGAN  SOUTHERN  RAILWAY 

COMPANY,  ET  AL. 

THE  SAME 

V. 

THE  LAKE  SHORE  AND  MICHIGAN  SOUTHERN  RAILWAY 

COMPANY. 

THE  SAME 

V. 

THE  NEW  YORK  CENTRAL  AND  HUDSON  RIVER  RAILROAD 

COMPANY. 

1  I.  C.  C.  436. 


Ill 


The  Boston  Chamber  op  Commerce 

V. 

The  Lake  Shore  &  IMichigan  Southern  Kvilway  Company,  et  al. 

Same 

V. 

The  Lake  Shore  &  Michigan  Southern  Railway  Company 

Same 

V. 

The  New  York  Central  &  Hudson  River  Railroad  Company, 
Decided  February  15,  1888. 

(1  I.  C.  C.  436.) 

1.  The  relative  reasonableness  of  rates  on  shipments  from  western  points  to  cities 

on  the  Atlantic  Seaboard  is  to  be  determined  by  all  the  circumstances  and 
conditions  that  aifect  the  traffic  to  the  respective  points  between  which  the 
rates  are  questioned,  and  not  solely  by  one  standard  of  comparison. 

2.  The  length  and  character  of  the  haul;    the  cost  of  service,  the  volume  of  the 

business;  the  conditions  of  competition;  the  storage  capacity  and  the  geo- 
graphical situation  at  the  different  terminal  points,  are  all  elements  of  im- 
portance, bearing  upon  the  relative  reasonableness  of  the  respective  charges 
for  transportation. 

3.  The  fact  that  the  export  rates  through  Boston,  and  the  rates  on  merchandise  in- 

tended for  coastwise  points  east  of  Portland,  and  the  west  bound  rates  from 
Boston,  have  been  made  by  the  carriers  the  same  as  corresponding  New  York 
rates,  in  order  to  put  Boston  on  an  equality  with  New  York  and  other  sea- 
board cities,  wherever  Boston  is  a  competitor  with  those  cities,  is  not  con- 
trolling in  determining  the  reasonableness  of  eastbound  Boston  local  rates  on 
a  traffic  in  which  there  is  no  competition  by  other  cities. 

4.  In  view  of  the  longer  haul  to  Boston  than  to  New  York;    the  greater  cost  of 

transportation  to  Boston;  the  very  much  greater  vokime  of  business  to  and 
from  New  York;  the  competition  by  water  transportation  by  the  Lakes,  Erie 
Canal  and  Hudson  Eiver,  and  also  by  several  railroad  lines;  and  the  geo- 
graphical and  commercial  advantages  of  New  York ;  the  differentials  on 
Boston  local  rates  of  ten  cents  per  hundred  pounds  on  the  first  and  second 
classes  of  merchandise,  and  of  five  cents  per  hundred  pounds  on  the  other 
four  classes,  between  New  York  and  Boston,  on  traffic  originating  west  of 
Buffalo,  have  not  been  shown  to  be  unjust  or  unreasonable,  or  to  constitute 
unjust  discrimination  against  Boston. 

Eon.  William  Gaston  and  C.  L.  B.  Whitney,  for  petitioners. 

George  C.  Greene,  for  Lake  Shore  and  Michigan  Southern  Railway 
Company. 

Frank  Loomis,  for  New  York  Central  and  Hudson  River  Railroad 
Company. 

Samuel  Hoar,  for  Boston  and  Albany  Railroad  Company. 

113 


114  ATLANTIC    PORT    DIFFERENTIALS 


REPORT  OF  THE  COMMISSION. 


ScHOONMAKER,  Commissioner: 

These  three  cases,  although  against  separate  carriers,  involve  one 
ground  of  complaint  relating  to  joint  through  rates,  and  the  petitions 
and  answers  being  substantially  alike,  the  issues  are  properly  disposed 
of  in  a  single  trial  and  decision. 

The  general  complaint  presented  by  the  petitions  is  that  the  joint 
through  rates  of  the  defendant  carriers  from  Chicago  and  some  other 
western  points  to  Boston  are  disproportionatel.y  higher  than  the  joint 
through  rates  of  the  two  first-named  carriers  to  New  York  City  and 
higher  than  the  export  rates  made  by  the  three  carriers  over  the  same 
line  to  East  Boston,  and  that  by  reason  of  such  higher  Boston  rates 
the  defendants  have  violated  the  first,  second,  and  third  sections  of  the 
Act  to  regulate  commerce. 

The  specific  complaint  is  that  the  rates  from  Chicago,  from  Elkhart, 
Ind.,  from  Toledo,  Cleveland,  Painesville,  and  Ashtabula,  Ohio,  and 
from  Girard,  Penn.,  on  the  first  and  second  classes  of  merchandise  to 
Boston  are  10  cents  a  hundred  pounds  higher  than  to  New  York,  and 
on  the  third,  fourth,  fifth,  and  sixth  classes  of  merchandise  are  5  cents 
a  hundred  pounds  higher  from  the  same  points  to  Boston  than  to  [438] 
New  York,  and  that  the  export  rates  through  East  Boston  and  the 
coastwise  rates  to  points  east  of  Portland,  Me.,  are  also  less  than  the 
Boston  rates,  being  the  same  as  New  York  rates.  The  petitions  charge 
that  these  differences  in  rates  are  not  founded  upon  nor  warranted  by 
the  difference  in  distance  nor  the  actual  cost  of  transportation,  and  are, 
therefore,  unreasonable  and  unjust,  and  are  an  unjust  discrimination 
against  Boston  and  give  undue  preference  and  advantage  to  New  York. 

The  answers  do  not  contest  the  differences  in  the  rates  specified,  but 
controvert  the  allegations  that  the  Boston  rates  are  unreasonable  and 
unjust  or  that  they  unjustly  discriminate  against  Boston  or  give  undue 
preference  and  advantage  to  New  York,  and  justify  the  differences  on 
the  ground  of  competition  with  water  carriers  and  other  carriers  nt 
New  York,  by  which  rates  are  fixed  to  which  the  defendants  must  con- 
form,'* and  allege  that  these  rates  as  well  as  the  export  rates  through 
East  Boston  and  the  coastwise  rates  to  points  east  of  Portland  are  for 
the  transportation  of  merchandise  under  circumstances  and  conditions 
dissimilar  to  the  transportation  terminating  at  Boston. 

The  testimony  adduced,  a  large  part  of  which  consists  of  agreed 
statements  and  illustrations,  has  taken  a  wide  range,  showing  the 
various  competing  carriers  from  Chicago  to  points  on  the  Atlantic  coast 
and  to  Boston  and  their  rates,  the  division  of  through  rates  among  the 


BOSTON  CHAMBER  COMMERCE  V.  L.  S.  &  M.  S.,  ET  AL.  115 

defendants,  the  business  of  Boston  and  New  York,  respectively,  and  tlie 
circnmstances  that  are  claimed  to  affect  the  rates  of  transportation. 

The  facts  proven  and  admitted  are  too  voluminous  to  be  set  forth  in 
full,  but  those  deemed  material  for  a  disposition  of  the  questions  in- 
volved are  as  follows : 

Facts  Found. 

The  petitioner  is  one  of  several  societies  in  the  City  of  Boston,  hav- 
ing a  membership  of  about  829  merchants,  engaged  in  the  flour,  grain, 
provision,  and  other  business  in  that  city.  The  society  has  authority  to 
bring  this  proceeding  and  its  members  are  interested  in  the  business 
Avhich  is  the  subject-matter  of  the  controversy. 

[439]  The  Lake  Shore  and  Michigan  Southern  Railwaj^  Company 
owns  and  operates  a  line  of  road  extending  from  its  western  terminus, 
at  Chicago,  through  the  States  of  Illinois,  Indiana,  INIichigan,  Ohio, 
Pennsylvania,  and  New  York  to  Buffalo,  its  eastern  terminus.  The 
New  York  Central  and  Hudson  River  Railroad  Company  owns  and 
operates  a  line  of  road  which  runs  from  Buffalo,  its  western  terminus, 
where  it  connects  with  the  road  of  the  first-named  company,  to  Albany, 
on  the  Hudson  river,  and  thence  by  way  of  East  Albany,  on  the  op- 
posite side  of  the  river,  and  connected  with  Albany  by  a  bridge  over 
which  the  line  is  operated,  southerly  along  the  Hudson  river  to  its 
southern  terminus,  at  the  city  of  New  York. 

The  Boston  and  Albany  Railroad  Company  owns  and  operates  a  line 
of  road  which  runs  through  New  York  and  Massachusetts  from  its 
western  terminus,  at  East  Albany,  where  it  connects  with  the  road  of 
the  last  above-named  company,  to  its  eastern  terminus,  at  Boston. 

The  three  respondent  railroads  thus  Form  by  connection  with  each 
other  a  through  railroad  line  from  Chicago  to  Boston,  and  the  two  first 
named  respondents  also  form  a  through  railroad  line  from  Chicago  to 
New  York,  and  the  said  lines,  respectively,  have  established  joint  tariffs 
of  rates,  fares,  and  charges  for  such  continuous  lines,  and  each  of  said 
companies  operates  its  own  road. 

Before  and  since  the  Act  to  regulate  commerce  took  effect  the  first 
two  respondent  railroads  have  been  largely  engaged  in  transporting 
from  Chicago  to  New  York,  by  continuous  carriage  and  under  a  joint 
arrangement  as  to  through  rates,  the  issuance  of  bills  of  lading,  and  the 
interchange  of  cars,  large  quantities  and  varieties  of  merchandise, 
which  have,  since  the  Act  to  regulate  commerce  took  effect,  been  divided 
into  six  different  classes  in  the  traffic  tariffs. 

The  length  of  the  entire  haul  from  Chicago  to  New  York  is,  for  pur- 
poses of  division,  taken  at  984  miles  made  up  as  follows : 

L.  S.  and  M.  S.,  Chicago  to  Buffalo 538  miles. 

N.  Y.  C.  and  H.  E.,  to  New  York 446     " 


116  ATLANTIC    PORT   DIFFERENTIALS 

Actual  distance  from  Chicago  to  New  York 981  miles. 

L.  S.  and  M.  S.,  Chicago  to  Buffalo 540     " 

N.  Y.  C.  and  H.  E.,  Buffalo  to  East  Albany 299     " 

N.  Y.  C.  and  H.  E.,  East  Albany  to  New  York 142     " 

The  haul  from  Chicago  to  New  York,  via  the  Pennsylvania  Com- 
pany's line,  for  purposes  of  division,  is  920  miles  to  Jersey  City. 

During-  the  same  period  the  three  respondent  railroads  have  also  been 
largely  engaged  in  transporting  from  Chicago  to  Boston,  by  continuous 
carriage  and  under  a  joint  arrangement  as  to  rates,  issuance  of  bills  of 
lading,  and  interchange  of  cars,  the  same  several  classes  of  merchandise. 

The  entire  haul  from  Chicago  to  Boston  is  1,040  miles,  for  purposes 

of  division  made  up  as  follows : 

L.  S.  and  M.  S.,  Chicago  to  Buffalo 538  miles. 

N.  Y.  C.  and  H.  E.,  Buffalo  to  East  Albany 301  " 

Boston  and  Albany,  East  Albany  to  Boston 201  " 

Actual  haul  Chicago  to  Boston 1,040  ' ' 

L.  S.  and  M.  S.,  Chicago  to  Buffalo 540  " 

N.  Y.  C.  and  H.  E.,  Buffalo  to  East  Albany 299  " 

Boston  and  Albany,  East  Albany  to  Boston 201  ' ' 

In  the  tariff  classification  flour  and  grain  in  car-load  lots  are  in  the 
sixth  class ;  in  less  than  car-load  lots  in  the  fifth  class ;  provisions,  such 
as  salted  meats,  pork  products,  etc.,  in  car-load  lots  in  the  fifth  class; 
in  less  than  car-load  lots  in  the  fourth  class ;  butter  and  eggs  in  the 
second  class,  and  cheese  in  the  third  class. 

The  joint  rates  and  charges  fixed  whereby  the  respondents  under  the 
arrangements  between  them  for  the  through  transportation  per  hun- 
dred pounds  for  the  several  classes  of  merchandise  from  Chicago  to 
New  York  and  from  Chicago  to  Boston,  respectively,  are  as  follows : 


Class. 

To  New  York. 

To 

Boston. 

1st 

75 
65 
50 
35 
30 
25 

85 

2d   

75 

3d 

55 

4th 

40 

5th    

35 

6th 

30 

These  rates  when  extended  to  car-load  lots  of  flour  and  grain  (sixth 
class),  averaging  30,000  pounds  per  car,  result  as  follows: 

Freight  per  car  Chicago  to  New  York, $75 .  00 

Freight  per  car  Chicago  to  Boston, 90 .  00 

The  additional  transportation  charged  to  Boston  of  10  cents  per 
liundred  pounds  for  the  first  two  classes  and  of  5  cents  per  hundred 


BOSTON  CHAMBER  COMMERCE  V.  L.  S.  &  M.  R.,  ET  AL.  117 

pounds  for  the  four  other  classes  over  the  New  York  rates  for  like 
kinds  of  merchandise  is  an  extra  fixed  charge  or  arbitrary  which  has 
for  many  years  been  added  to  the  New  York  rate  in  fixing  the  Boston 
rate,  irrespective  of  the  amount  of  the  New  York  rate. 

The  term  arbitrary  is  a  technical  term  expressing  a  difference  which 
does  not  chaiige  with  the  through  rate,  and  similar  arbitrary  differences 
have  for  years  prevailed  at  ]\Iontreal,  Philadelphia,  and  Baltimore  of 
2  cents  at  the  first  two  cities  and  3  cents  at  the  last-named  less  than  the 
New  York  rate. 

For  westbound  freight  no  additional  charge  for  transportation 
from  Boston  to  Chicago  over  the  rate  from  New  York  to  Chicago  has 
for  several  years  been  made,  but  the  rates  from  both  cities  have  been 
the  same ;  and  since  the  Act  to  regulate  commerce  took  effect  the  rates 
for  westbound  freight,  both  from  Boston  and  New  York,  have  been  the 
same  as  the  eastbound  rates  from  Chicago  to  New  York  for  the  different 
classes. 

The  through  rates  which  under  the  agreement  between  the  roads  are 
charged  for  the  transportation  of  the  different  classes  of  merchandise 
from  Chicago  to  New  York  and  to  Boston,  respectively,  are  collected 
from  the  shipper  or  consignee,  as  the  case  may  be,  in  a  lump  sum ;  and 
the  moneys  so  collected  are  distributed  among  the  roads  according  to 
certain  percentages  or  divisions  fixed  upon  between  them,  based  upon 
the  distances  taken  for  that  purpose,  before  stated,  and  not  upon  the 
actual  mileage  of  the  respective  roads.  These  percentages  or  divisions 
of  the  through  rates  are  shown  in  detail  by  the  testimony,  but  are  not 
deemed  material,  and  are  therefore  omitted  from  these  findings. 

The  distance  by  the  Pennsylvania  railroad  and  its  connections  to  the 
points  reached  by  it  are  as  follows : 

Chicago  to  Philadelphia 830  miles. 

Chicago  to  New  York 920     ' ' 

Chicago  to  Boston  1,252     ' ' 

[442]  The  rates  by  the  Pennsylvania  lines  to  Philadelphia  from 
Chicago  are  2  cents  less  per  hundred  pounds,  or  $6.00  per  car-load  of 
30,000  pounds,  than  to  New  York,  and  the  rates  by  these  lines  to  New 
York  City  and  to  Boston,  respectively,  are  the  same  as  by  the  respond- 
ents' lines. 

The  merchandise  intended  for  New  York  and  the  merchandise  in- 
tended for  Boston  are  in  their  transportation  from  Chicago  to  East 
Albany  carried  over  the  same  lines  and  the  same  distances. 

Since  the  Act  to  regulate  commerce  went  into  effect  the  three  re- 
spondent carriers  have  also,  under  through  bills  of  lading  from  Chicago 
to  Liverpool  and  other  foreign  ports,  been  largely  engaged  (under  a 


118  ATLANTIC    PORT    DIFFERENTIALS 

joint  arrangement  for  rates  between  themselves  and  steamship  com- 
panies or  vessels  performing  ocean  carriage  from  Boston)  in  transport- 
ing the  various  classes  of  merchandise,  but  more  especially  flour  and 
grain,  over  their  respective  roads  from  Chicago  to  East  Boston,  where 
the  merchandise  has  been  transferred  to  vessels  or  steamships,  which 
have  then  carried  the  same  to  the  foreign  ports  of  destination. 

East  Boston  is  the  water  terminus  of  the  Boston  and  Albany  road, 
and  is  reached  by  the  Grand  Junction  branch  of  that  road,  which 
leaves  the  main  line  at  Cottage  Farms,  in  the  town  of  Brookline,  and  is 
(]  miles  farther  than  Boston,  but  for  jiurposes  of  division  of  the  through 
rate  it  is  allotted  as  20  miles,  giving  a  constructive  mileage  to  the  Bos- 
ton and  Albany  from  East  Albany  to  East  Boston  of  221  miles. 

Upon  the  goods  transported  to  East  Boston  for  export  purposes  the 
rate  received  by  the  three  carriers  as  their  share  of  the  through  rate 
from  Chicago  to  Liverpool  has  been  at  all  times  since  the  Act  to  regu- 
late commerce  took  effect  less  than  the  rates  charged  by  them  for  like 
merchandise  to  Boston  proper  or  to  points  on  the  Boston  and  Albany 
road  west  of  the  Grand  Junction  at  Cottage  Farms,  and  for  the  greater 
part  of  the  time  the  rate  on  export  business  to  East  Boston,  has  been 
the  same  as  the  rate  to  New  York.  Flour  and  grain  in  car-loads  to 
East  Boston  for  local  use  are  charged  the  regular  Boston  rate  of  30 
cents  per  hundred  pounds. 

Since  the  30th  of  April,  1887,  the  said  carriers,  under  an  [443]  ar- 
rangement between  them,  have  allowed  upon  merchandise  transported 
over  their  roads  from  Chicago  to  Boston  or  East  Boston,  and  which  has 
paid  the  regular  Boston  tariff  rates  and  which  has  afterward,  by  sub- 
sequent determination  of  the  owner,  been  reshipped  to  Liverpool  or 
other  foreign  ports,  a  rebate  or  allowance  of  10  cents  per  hundred 
pounds  on  the  first  two  classes  and  of  5  cents  per  hundred  pounds  on  the 
other  classes  of  merchandise,  equalizing  them  w^ith  the  New  York  rates, 
and  such  rebates  have  been  equal  and  impartial,  without  discri^nination 
between  persons  engaged  in  foreign  traffic.  In  such  cases  of  reship- 
ment  from  Boston  all  wharfage  charges,  if  any,  are  paid  b^^  the  ship- 
per, and  there  are  no  lighterage  charges. 

The  said  three  carriers,  since  the  Act  to  regulate  commerce  took 
effect,  have  also,  under  an  arrangement  between  them,  allowed  upon 
merchandise  originally  transported  over  their  roads  from  Chicago  to 
East  Boston  and  thence  by  continuous  shipment  (or  to  Boston  and 
thence  by  subsequent  reshipment)  carried  by  water  to  any  ports  in  the 
State  of  Maine  east  of  Portland  a  through  rate  or  rebate  precisely  the 
same  as  in  the  case  of  merchandise  billed  through  for  foreign  ports, 
but  when  such  merchandise  has  been  carried  by  rail  or  shipped  by 


BOSTON  CHAMBER  COMMERCE  V.  L.  S.  &  M.  S.,  ET  AL,  119 

'.\ater  to  any  other  points  in  the  riiited  States,  eitlier  on  the  coast  or  in 
the  interior,  no  such  through  rates  or  allowances  have  been  made. 

Since  the  Act  to  regulate  commerce  went  into  effect  the  respondent 
roads  have  also  been  engaged  in  the  transportation  of  the  several  classes 
cf  merchandise,  both  eastward  and  westward,  between  New  York  and 
Boston,  respectively,  and  the  following  places,  viz:  Elkhart,  in  the 
State  of  Indiana ;  Toledo,  Cleveland,  Painesville,  and  Ashtabula,  in  the 
State  of  Ohio,  and  Girard,  in  the  State  of  Pennsylvania ;  and  in  such 
transportation  the  same  differences  of  10  cents  and  5  cents  per  100 
pounds,  respectively,  between  the  New  York  rate  and  the  Boston  rate 
for  eastbound  freight  has  been  maintained  by  the  respondent  roads, 
as  also  the  same  system  of  special  rates  and  of  allowances  or  rebates  in 
the  case  of  such  merchandise  carried  beyond  Boston,  as  before  set  forth. 
The  same  facts  and  reasons  exist  for  the  justification  or  the  [444]  con- 
trary of  said  differences  as  in  the  case  of  shipments  from  Chicago. 
Numerous  points  in  New  England  are  reached  by  railways  branching 
from  the  Boston  and  Albany  railroad  between  Albany-  and  Boston. 
IMerchandise  carried  from  Chicago  and  other  western  points  for  Bos- 
ton and  New  England  points  goes  by  other  lines  than  the  respondent 
roads,  namely,  the  Pennsylvania  railroad,  the  New  York,  Lake  Erie 
and  Western  railroad,  the  Delaware,  Lackawanna  and  Western  rail- 
road, the  Grand  Trunk  railway.  The  lines  herein  referred  to  are  all 
liiembers  of  the  Trunk  Line  Association. 

The  rates  from  Chicago  to  New  York  by  the  several  all-rail  routes 
are  the  same.  The  rates  from  Chicago  to  Boston  by  the  several  all-rail 
routes  are  5  cents  above  the  New  York  rates  on  the  third,  fourth,  fifth, 
and  sixth  classes,  and  10  cents  higher  on  the  first  and  second  classes. 
The  all-rail  routes  to  Portland,  Me.,  by  the  roads  over  which  the 
through  routes  are  made,  are  the  same  as  to  Boston.  The  rates  to 
Montreal  and  to  Philadelphia  by  the  several  all-rail  routes  are  2  cents 
per  hundred  pounds  lower  than  to  New  York,  The  rates  to  Baltimore 
and  to  New^port  News  by  the  several  all-rail  routes  are  3  cents  per'  hun- 
dred pounds  lower  on  all  classes  than  to  New  York.  The  rates  of  trans- 
portation by  the  lakes  and  other  waterwaj^s  are  at  all  times  lower  than 
the  rates  by  all-rail  routes. 

On  portions  of  the  shipments  to  New  York  harbor  and  to  East  Boston 
there  are  lighterage  and  some  wharfage  charges  which  are  as  follows: 

On  shipments  to  points  in  New  York  harbor,  other  than  New  York 
Central  road  stations,  3  cents  per  cwt.  lighterage.  On  shipments  to  East 
Boston  for  export,  via  Warren  line,  1/2  cent  per  bushel  lighterage  on 
grain,  and  on  shipments  to  Boston  for  export  by  four  other  lines  a 
lighterage  charge  of  %  cents  per  bushel  and  wharfage  charge  of  1/0 


120  ATLANTIC    PORT   DIFFERENTIALS 

cents  per  bushel  on  corn  and  wheat ;  also  at  Boston  a  lighterage  charge 
on  flour  of  45  cents  per  gross  ton,  and  wharfage  charge  of  1  cent  per 
sack  of  140  pounds ;  and  on  bacon  a  lighterage  charge  of  45  cents  per 
gross  ton  and  wharfage  charge  of  3  cents  per  box  of  600  pounds. 

The  lighterage  and  wharfage  charges  constitute  part  of  the  [445] 
through  rate,  and  are  borne  by  the  carriers  and  not  by  the  shippers, 
and  they  are  deducted  before  division  of  the  through  rates  among  the 
respective  carriers. 

After  deducting  lighterage  and  wharfage  charges,  the  earnings  of  the 
Ijake  Shore  and  IMichigan  Southern  and  New-  York  Central  and  Hud- 
son River  roads  from  Chicago  to  New  York,  New  York  harbor,  and 
Albany  on  car-load  shipments  of  30,000  pounds  are  as  follows : 

Lake  Shore,  on  corn,  wheats  and  flour,  to  New  York $41  00 

Lake  Shore,  on  corn,  wheat,  and  flour,  to  New  York  harbor 36  08 

Lake  Shore,  on  corn,  wheat,  and  flour,  to  Albany,  local 46  22 

Lake  Shore,  on  bacon,  28,000  pounds,  to  New  York 45  92 

Lake  Shore,  on  bacon,  28,000  pounds,  to  New  York  harbor 41  33 

Lake  Shore,  on  bacon,  28,000  pounds,  to  Albany,  local 50  33 

New  York  Central,  on  corn  and  flour,  to  New  York 23  04 

New  York  Central,  on  corn  and  flour,  to  New  York  harbor   20  28 

New  York  Central,  on  corn  and  flour,  to  Albany,  local 25  78 

New  York  Central,  on  bacon,  28,000  pounds,  to  New  York  25  81 

New  York  Central,  on  bacon,  28,000  pounds,  to  New  York  harbor 23  23 

New  York  Central,  on  bacon,  28,000  pounds,  to  Albany,  local 28  06 

The  earnings  of  the  three  carriers,  respondents,  on  shipments  from 
Chicago  to  Boston  in  like  car-loads,  after  deducting  lighterage  and 
wharfage,  are  as  follows : 

Lake  Shore,  on  corn  to  Boston $46  56 

"                    "           East  Boston,  export   36  71 

"                    "                    "                  "         35  02 

' '                  wheat  to  Boston  46  56 

"                     "               East  Boston,  export 36  79 

"                    "                      "                  "        35  20 

' '                   flour  to  Boston   46  56 

"                    "            East  Boston,  export  38  06 

"                     "                     "                  "         33  92 

'  *                  bacon  to  Boston   50  70 

"                    "             East  Boston,  export   42  63 

"                    "                    "                  "         39  08 

New  York  Central,  on  corn  to  Boston    26  05 

"                "                  "           East  Boston,  export   20  54 

"                "                  "                    "                  "         19  59 

"                "                 flour  to  Boston    26  05 

"                "                  "           East  Boston,  export 21  30 

18  98 

"                "                bacon  to  Boston   28  36 

"                "                  "             East  Boston,  export    23  36 

"                "                  "                      "                  '''         21  87 

Boston  and  Albany,  on  corn  to  Boston   17  40 

"                 "           East  Boston,  export 15  08 

"                  "                     "                   "        14  38 

' '               wheat  to  Boston  17  40 

"             East  Boston,  export 15  11 

"                    "                  "       14  46 


BOSTON  CHAMBER  COMMERCE  V.  L.  S.  &  M.  S.,  ET  AL.  121 

Boston  and  Albany,       fiour  to  Boston    17  40 

"                 "            East  Boston,  export   15  64 

"                 "                    "                  "       13  94 

' '               bacon  to  Boston   18  94 

"                 "              East  Boston,  export   17  51 

"                 "                     "                   "         16  05 

The  difference  in  the  divisions  of  the  export  rates  through  East 
Boston  is  occasioned  by  the  difference  in  the  charges  for  lighterage  and 
wharfage,  deducted  before  division. 

The  rates  charged  by  the  defendant  carriers  are  as  low  as  the  rates 
by  any  other  all-rail  route  from  Chicago  to  Boston. 

The  cost  of  service  from  Chicago  to  Boston  exceeds  the  cost  of  serv- 
ice to  New  York  more  than  is  accounted  for  by  the  increase  in  distance 
by  reason  of  the  fact  that  the  grades  on  the  Boston  and  Albany  railroad 
are  heavy,  while  there  are  practically  no  grades  between  Albany  and 
New  York,  and  the  further  facts  that  the  cost  of  coal  is  greater  to  the 
Boston  and  Albany  Railroad  Company  than  to  the  New  York  Central 
and  Hudson  River  Railroad  Company,  and  more  is  consumed  and  more 
engines  and  train  crews  are  used  in  handling  an  equal  number  of  cars. 
Trains  destined  for  Boston  and  New  England  points  are  also  broken 
up  at  Albany  and  hauled  over  the  Albany  bridge  by  a  switch-engine 
to  East  Albany  and  made  up  into  trains  on  the  Boston  and  Albany 
road. 

Merchandise  sent  by  rail  from  Boston  to  Chicago  and  other  western 
points  mentioned  in  the  petition  is  sold  by  merchants  and  manufac- 
turers of  Boston  and  New  England  in  competition  with  similar  mer- 
chandise sent  from  New  York  by  merchants  and  manufacturers  there, 
and  with  similar  merchandise  sent  from  other  eastern  cities,  ports  of 
entry,  and  States. 

Chicago  and  other  western  points  aforesaid  are  common  markets  in 
which  merchants  and  manufacturers  of  all  [447]  eastern  cities,  ports  of 
entry,  and  States  engage  in  competition.  Various  lines  of  ocean  steam- 
ers and  other  vessels  ply  between  Boston  and  foreign  ports.  Boston  is 
the  second  port  of  entry  in  importance  in  the  United  States,  and  the 
value  of  its  imports  for  the  year  1886  was  $58,430,707.00. 

Much  of  the  merchandise  imported  into  the  United  States  seeks  a 
western  market,  and  to  accord  equality  of  competition  receives  as  low  a 
rate  from  Boston  to  that  market  as  prevails  at  New  York. 

Much  of  the  merchandise  imported  consists  of  raw  material  used 
in  the  manufactories  of  New  England  and  there  manufactured  and  sent 
west  for  sale.  These  manufactories  are  some  of  them  situated  at  points 
along  the  line  of  the  Boston  and  Albany  railroad  and  its  connections, 
many  of  which  points  are  also  reached  by  the  transportation  routes 
leading  from  New  York. 


122  ATLANTIC    PORT    DIFFERENTIALS 

The  receipts  of  grain  and  flonr  at  New  York  during  a  period  of  seven 
months,  from  April  1st  to  October  31st,  in  the  years  1886  and  1887, 
were  as  follows : 

1886.  Graiu 65,958,263  bushels. 

' '  Flour  3,206,008 

1887.  Graiu  65,492,262  ' ' 

' '  Flour  3,373,520  ' ' 

The  proportions  of  the  grain  so  received  that  came  by  rail  and  by 

vvater  transportation  were  as  follows : 

1886.  By  rail   29,038,708  bushels. 

"    water    36,919,555       ' ' 

1887.  ' '     rail   27,721,262 

"       "     water    37,772,000       " 

The  present  rates  on  first  and  sixth  class  merchandise  from  Chicago 
and  some  other  western  cities  to  New  York  and  Boston,  and  also  what 
the  rates  to  Boston  by  different  rontes  would  be  if  computed  on  the  rate 
per  mile  charged  by  the  Pennsylvania  short  line,  are  as  follows : 

From  Chicago  (distance  via  Pennsylvania  railroad,  920  miles  to 
New  York;   1,252  to  Boston)  : 

Present  rate  to  New  York 1st  class,    75 ;  6th  class,  25 

"          "     "  Boston    "            85 ;  "            30 

To  Boston,  computed  via  Boston  and  Albany  railroad  .        "            85;  "            28 

To  Boston,  computed  via  Pennsylvania  railroad "          102 ;  "            34 

From  Cincinnati  (distance  via  Pennsylvania  railroad,  765  miles  to 
New  York;    1,097  to  Boston)  : 

Present  rate  to  New  York 1st  class,  65 ;  6th  class,  21% 

"  "     "Boston    "  75;  "  26y2 

T(^  Boston,  computed  via  Boston  and  Albany  railroad       "  79;  "  26 

To  Boston,  computed  via  Pennsylvania  railroad  ....        "  93;  "  31 

From  East  St.  Louis  (distance  via  Pennsylvania  railroad,  1,071  miles 
to  New  York;   1,403  to  Boston)  : 

Present  rate  to  New  York 1st  class,    87 ;  6th  class.  29 

"     "Boston     "            97;  "            34 

To  Boston,  computed  via  Boston  and  Albany  railroad  .        "           100;  "            33 

To  Boston,  computed  via  Pennsylvania  railroad "          114;  "            38 

From  Louisville  (distance  via  Pennsylvania  railroad  to  New  York, 
875  miles;   1,038  to  Boston)  : 

Present  rate  to  New  York 1st  class    75 ;  6th  class,  25 

"  "     "  Boston     "  ■  85 ;  "  30 

To  Boston,  computed  via  Boston  and  Albany  railroad  .        "  89;  "  30 

To  Boston,  computed  via  Pennsylvania  railroad "  104;  "  35 

The  total  receipts  of  grain  and  flour  expressed  in  bushels  received  at 
the  five  Atlantic  cities  of  New  York,  Philadelphia,  Baltimore,  Boston, 
and  Montreal  during  the  year  1886  were  249,062,939  bushels,  the 
amount  exported  150,383,499  bushels,  and  the  percentages  of  the 
amounts  so  received  and  exported  were  as  follows : 


BOSTON  CHAMBER  COMMERCE  V.  L.  S.  &  M.  S.,  ET  AL.  123 


New  York  receive 

1  52.5; 

exj)()rtei 

47.4. 

Philadelphia 

" 

8.7; 

" 

(3.7. 

Baltimore 

( ( 

15.6; 

" 

21.4. 

Boston 

" 

14.4; 

( ( 

10.8. 

Montreal 

<  < 

8.8; 

<  ( 

13.7. 

The  amount  of  grain  only  received  at  the  same  cities  during  the 
same  time  was  187,263,713  bushels,  the  amount  exported  110,795,038 
bushels,  and  the  percentages  of  the  res[449]peetive  amounts  received 
and  exported  by  the  several  cities  were  as  follows : 


New  York  received 

55 . 7 ; 

exported  49.8. 

Philadelphia      ' ' 

8.7; 

7.4. 

Baltimore          ' ' 

16. 1; 

"         22.2. 

Boston                 ' ' 

10.4; 

'5.8. 

Montreal            ' ' 

9.1; 

14.8. 

These  percentages  have  not  been  uniform  in  different  3'ears,  but  have 
fluctuated  somewhat  during  the  last  ten  j-ears,  and  have  decreased  more 
at  Philadelphia  than  elsewhere.  The  number  of  steamers  sailing 
monthl}'  from  New  York  and  plying  between  that  city  and  various 
foreign  ports  is  115,  with  a  total  carrying  capacity  of  263,200  tons, 
aggregating  for  a  year  1,380  steamers  and  3.178,400  tons  capacity,  to 
which  it  is  claimed  may  safely  be  added  10  per  cent,  of  tonnage  for 
coast  lines,  tramp  vessels,  etc.  The  number  of  steamers  sailing  from 
Boston  to  foreign  ports  for  the  year  ending  September  30,  1887,  was 
235,  and  to  provincial  ports  357;  total,  792.  The  tonnage  was  not 
shown. 

The  rates  from  Chicago  to  New  York  on  wheat  and  corn  bj^  lake  and 
canal  from  ]\Iay  2  to  October  22,  1887,  averaged  on  wheat  about  9  cents 
per  bushel,  including  elevation,  and  on  corn  a  little  less.  The  rates  by 
lake  and  rail  were  nearly  uniform,  at  12  cents  per  bushel  on  wheat  and 
11^^  on  corn,  while  at  the  same  time  the  rates  by  all-rail  on  wheat  were 
15  cents  a  bushel  and  14  cents  on  corn. 

There  are  fourteen  lines  or  routes  of  transportation  from  southern 
and  western  points  through  Chicago  to  New  York,  including  one  water 
line  by  way  of  the  lakes,  Erie  Canal,  and  Hudson  River.  An  equal  num- 
ber of  lines  or  routes  reach  Boston,  all  of  them  rail  routes  east  of 
Buffalo. 

The  foreign  commerce  of  the  port  of  New  York  for  the  fiscal  year 
ending  June  30,  1886,  was  $802,535,015,  and  the  foreign  commerce  of 
all  the  other  ports  of  the  United  States  for  the  same  time  was  $1,426,- 
018,032. 

The  value  of  the  domestic  exports  from  the  city  of  New  York  for  the 
fiscal  year  ending  June  30, 1886,  was  $346,412,339. 

The  value  of  the  domestic  exports  from  the  city  of  Boston  for  the 
same  time  was  $53,429,513. 


124  ATLANTIC    PORT   DIFFERENTIALS 

[450]  The  values  of  the  domestic  exports  from  all  the  ports  of  the 
United  States,  except  New  York,  for  the  same  time  were  $371,476,307. 

The  tonnage  of  the  Erie  canal,  arriving  at  tide  water  for  the  year 
1886  was  as  follows : 

Tonnage  from  Western  States, 1,525,901  tons. 

Tonnage  from  New  York  State, 924,130     ' ' 

Total  by  Erie  canal, 2,450,031     " 

And  the  estimated  value  of  the  property  transported  on  the  Erie 
canal  for  the  same  year  was  $163,726,849. 

The  through  rate  from  Chicago  to  Boston  is  a  little  less  than  6  mills 
per  ton  per  mile,  and  all  other  rates  to  the  points  north  and  west  of 
Boston  on  the  main  line  by  which  they  reach  Boston  are  the  same  as 
Boston  rates. 

Opinion  and  Conclusions. 

The  facts  recited  sufficiently  indicate  the  differences  in  rates  between 
New  York  and  Boston  of  which  complaint  is  made  and  the  reasons  for 
the  differences  that  have  weight  with  the  railroad  carriers.  Other  facts 
also  appeared  in  evidence  to  which  pa.ssing  reference  may  be  made. 
The  complaint  relates  solely  to  the  east-bound  rates  from  Chicago  and 
some  other  western  points  to  Boston  proper. 

For  export  business  through  Boston  and  for  shipments  to  points  east 
cf  Portland  and  for  all  west-bound  business  the  Boston  rates  are  on 
an  equality  with  New  York  rates,  and  no  ground  of  complaint  exists 
that  Boston  is  discriminated  against  in  respect  to  those  rates.  The  gen- 
eral fact  is  thus  apparent  that  for  the  business  in  which  Boston  is  a  com- 
petitor with  New  York,  both  export  and  west-bound,  the  rail  rates  for 
both  cities  are  ecjual,  and  in  that  respect  neither  city  has  any  advantage 
ever  the  other.  Except  in  the  particulars  mentioned  Boston  is  upon  a 
substantial  equality  of  rates  with  all  the  cities  that  are  its  competitors 
on  the  Atlantic  seaboard. 

Complaint  is  not  made  that  the  Boston  export  rates  and  the  coast- 
wise rates  to  points  east  of  Portland  are  unlawful  [451]  under  the 
fourth  section  of  the  Act,  and  they  are  conceded  on  the  part  of  the  pe- 
titioners to  be  necessary  to  enable  Boston  to  participate  in  the  foreigji 
and  coastwise  trade;  but  the  fact  of  such  lower  rates  and  the  lower 
west-bound  rates  is  pressed  as  a  strong  argument  that  the  east-bound 
Boston  local  rates  are  unjust  and  should  be  reduced  to  the  export  rates. 

The  export  and  coastwise  rates  through  Boston  not  being  assailed  in 
this  proceeding,  the  question  of  their  lawfulness  is  not  now  before  the 
Commission.     The  complainants  in  their  brief  disclaim  any  desire  to 


BOSTON  CHAMBER  COMMERCE  V,  L.  S.  &  M.  S.,  ET  AL.  125 

disturb  the  export  rates  in  these  words:  "The  petitioner  wishes,  how- 
ever, it  distinctly  understood  that  while  it  appeals  to  the  facts  con- 
nected with  the  Boston  export  trade  as  proving  that  the  Boston  local 
arbitrary  is  unreasonable  it  does  not  wish  in  any  way,  directly  or  in- 
directly, injuriously  to  affect  the  foreign  commerce  of  the  port  of  Bos- 
ton, and  it  therefore  does  not  ask  an  order  enjoining  the  continuance  of 
such  export  rate  or  of  the  export  rebate  sj'stera;  its  only  desire  in  this 
regard  is  that  the  local  rate  shall  at  all  events  be  made  as  low  as  the 
export  rate,  as  it  is  in  all  other  Atlantic  seaboard  cities  save  Portland." 

After  such  an  explicit  withdrawal  of  any  question  affecting  the  law- 
fulness of  the  export  rates  and  rebates  the  Commission  is  not  required 
to  pass  upon  them  in  this  case.  It  is  obvious  that  an  adjudication  upon 
those  rates  requires  additional  parties  to  the  record  and  an  opportunity 
to  be  heard  on  the  part  of  the  various  business  interests  likely  to  be 
affected  by  any  determination  reached.  Although  incidental  reference 
is  made  to  those  rates  no  decision  is  rendered  upon  them  and  no  opinion 
relating  to  them  is  intended  to  be  expressed. 

The  sole  question  for  determination  is  whether  the  east-bound  rates 
to  Boston,  which  are  10  cents  per  hundredweight  higher  on  the  first 
and  second  classes  of  merchandise  and  5  cents  per  hundredweight 
higher  on  the  third,  fourth,  fifth,  and  sixth  classes,  are  unjust  and  un- 
reasonable, and  therefore  unjustly  discriminate  against  Boston. 

[452]  The  claim  of  the  petitioners  is  that  the  Boston  local  rates  shall 
be  made  as  low  as  the  export  rates ;  in  other  words,  that  they  shall  be 
on  equality  with  the  New  York  rates.  A  claim  of  this  character,  if 
made  as  matter  of  right  and  not  of  favor,  should  be  founded  upon  a 
corresponding  equality  or  substantial  similarity  of  circumstances  and 
conditions  that  control  the  making  of  rates  by  carriers,  and  to  some 
extent  their  effect  upon  the  business  of  localities. 

If  differences  in  the  conditions  of  the  traffic  to  two  or  more  points 
exist  which  materially  affect  the  cost  or  the  value  of  the  service  it  would 
scarcely  be  reasonable  to  require  a  carrier  to  disregard  those  differences 
and  make  good  to  every  community  disadvantages  of  situation  or  othei' 
disadvantages.  As  has  been  well  said,  "Different  localities  are  more 
or  less  favored,  in  regard  to  transportation  facilities,  either  by  nature 
or  the  enterprise  of  man.  It  cannot  be  maintained  that  it  is  the  duty 
of  the  common  carrier  to  equalize  these  existing  inequalities  at  his  own 
expense.  All  that  is  required  of  him  is  not  to  create  them  himself  arbi- 
trarily. He  must  treat  all  alike  that  are  situated  alike,  but  he  cannot 
be  bound  to  wipe  out  existing  differences.  He  may  be  obliged  to  carry 
freight  at  a  lower  rate  to  some  localities  than  to  others,  but  this  in  it- 
self does  not  constitute  an  injustice  or  injury  to  the  shipper  in  a  less 


126  ATLANTIC    PORT   DIFFERENTIALS 

favored  locality  so  long  as  the  charges  are  reasonable  in  themselves  and 
alike  to  all  in  the  same  situation."  "With  the  qualification  indicated  in 
the  case  of  The  Boards  of  Trade  Vnion  of  Farmingtoii,  d'c,  against  The 
Chicago,  Milivawkee  and  St.  Paul  R.  E.  Co.  (1  Interstate  Com.  Rep., 
2] 5),  that  rates  should  be  relatively  reasonable  when  the  same  carrier 
transports  over  diiferent  branches  of  its  road  to  a  common  market,  these 
principles  may  be  accepted  as  correctly  stated. 

The  contention  of  the  petitioners  for  equality  of  rates  with  New  York 
is  not  supported  by  equality  of  distance,  of  cost  of  service,  or  by  other 
considerations,  such  as  volume  of  business,  competition  of  rail  and 
waterways,  ocean  service,  terminal  facilities,  and  storage  capacity — all 
elements  of  more  or  less  importance  in  the  determination  of  rates,  and 
some  of  them  of  controlling  influence. 

The  argument  of  the  petitioners  is  based  almost  entirely  upon  [453] 
the  distances  hauled  and  tlie  assumed  parity  of  cost  of  service,  and  elab- 
orate calculations  founded  on  distances  bj^  various  lines  have  been 
produced  showing  the  through  rates  to  different  seaboard  cities  from 
initial  western  points,  the  divisions  of  through  rates  among  connecting 
carriers,  the  lighterage  expenses  at  New  York,  and  other  incidental 
matters.  It  appears  from  these  statistics  that  the  Lake  Shore  and 
Michigan  Southern  road  and  the  New  York  Central  to  Albany  receive 
each  a  slightly  higher  amount  of  the  through  Boston  local  rate  than  of 
the  through  rate  to  New  York ;  but,  as  the  contention  is  with  the 
through  rate  to  Boston  as  a  unit,  the  divisions  of  that  rate  and  the  pro- 
portions received  by  the  respective  carriers  forming  the  line  are  unim- 
portant for  the  purposes  of  this  case.  The  lighterage  charges  at  New 
York  are  also  irrelevant  to  the  questions  to  be  determined.  They  are 
part  of  the  rate  paid  by  the  shipper  to  that  city,  and,  when  necessary, 
upon  a  portion  of  the  merchandise  handled  there  are  borne  by  the  car- 
riers as  an  element  of  transportation  expenses.  They  are  not  separable 
from  the  aggregate  rate  for  the  purpose  of  any  question  involved  in 
this  decision.  The  total  charge  for  transportation  is  all  that  concerns 
the  shipper,  and  not  the  percentages  allotted  by  agreement  to  one  or 
more  of  the  connecting  carriers  in  a  through  line.  Carriers  voluntarily 
enter  into  agreements  for  through  shipments  over  connecting  roads, 
and  the  division  of  the  through  rate  is  part  of  their  mutual  agreement 
which  the  parties  to  the  arrangement  adjust  for  themselves  and  the 
adjustment  of  which  does  not  affect  the  shipper.  Such  adjustments 
may  not  be  on  the  exact  basis  of  cost  of  service  in  any  ease,  and  many 
other  considerations  may  influence  the  parties  in  making  them.  The 
fact  may  be,  therefore,  that  the  Lake  Shore  road  and  the  New  York 
Central  road  may  each  receive  more  in  amount  of  the  through  rate  to 


BOSTON  CHAMBER  COMMERCE  V.  L.  S.  &  M.  S.,  ET  AL. 


127 


Boston  from  Chicago  than  to  New  York  for  the  respective  hauls  to 
Albany,  although  the  service  to  that  point  is  identical,  but  the  tlirougli 
rates  are  charged  for  the  entire  haul  to  the  final  destination  and  are 
not  governed  by  the  service  to  some  intermediate  point  in  the  line  or 
where  the  line  diverges  to  different  destinations. 

[454]  The  element  of  cost  of  service  which  may  at  one  period  have 
been  recognized  as  controlling  in  fixing  rates  has  long  ceased  to  be  re- 
garded as  the  sole  or  the  most  important  factor  for  that  purpose.  The 
value  of  the  service  with  respect  to  the  articles  carried,  the  volume  of 
business,  and  the  conditions  and  force  of  competition  are  justly  con- 
sidered to  have  controlling  weight  in  determining  the  charges  for  trans- 
portation. But  even  with  regard  to  the  cost  of  service  the  cost  is  at 
least  somewhat  greater  to  Boston  than  to  New  York. 

The  large  trains  drawn  by  one  engine  over  the  easy  routes  of  the 
Lake  Shore  and  New  York  Central  roads  are  broken  up  at  Albany, 
taken  over  the  Albany  bridge,  and  switched  to  the  tracks  of  the  Boston 
and  Albany  road,  and  on  account  of  the  heavy  grades  of  that  road  are 
made  up  into  much  smaller  trains,  requiring  more  engines,  additional 
consumption  of  coal,  and  a  greater  number  of  trainmen.  The  deten- 
tion of  cars  at  Boston  and  in  New  England  is  also  somewhat  greater 
than  at  New  York.  These  are  items  that  enter  into  the  cost  of  service, 
and,  though  they  may  not  be  large,  they  affect  it  to  a  material  extent. 

The  distance  to  Boston  is  also  56  miles  greater.  One  of  the  tables 
jtut  in  evidence  by  the  petitioners  gives  a  computation  of  the  propor- 
tional rates  to  New  York  and  Boston  based  on  distance  alone,  the  'lis- 
tances  being,  respectively,  084  miles  to  New  York  and  1,040  to  Boston, 
wilh  the  following  showing: 


Class. 

New  York. 

Boston. 

Boston, 
prop  '1. 

Differ. 

1st     

75  cents. 
05     " 
50     ' ' 
35     ' ' 
30     " 
25     " 

85  cents. 
75     " 
55     " 
40     " 
35     " 
30     " 

79.3 
68.7 
52.9 
37.0 
31.7 
26.4 

5.7 

2d 

3«i 

6.3 
2.1 

4th    

3.0 

5th    

6th    

3.3 
3.6 

This  calculation  leaves  only  a  small  margin  to  be  made  up  by  the 
other  elements  that  affect  the  relative  reasonableness  of  the  rates  to  the 
two  cities. 

The  volume  of  business  to  Boston  as  compared  with  that  to  New 
York,  in  view  of  the  universally  accepted  principle  of  railroad  trans- 
portation that  a  very  large  traffic  can  be  profitably  conducted  at  lower 


128  ATLANTIC    PORT   DIFFERENTIALS 

rates  than  a  relatively  small  traffic,  [455]  furnishes  a  substantial 
ground,  supported  by  adequate  business  reasons,  for  differences  in 
rates  that  might  be  urged  to  justify  to  a  great  extent  the  existing  dis- 
parity. 

Of  the  grain  and  flour  received  at  the  six  principal  Atlantic  ports 
from  the  west  during  the  year  1886  New  York  received  52.5  per  cent. ; 
Boston  received  14.4  per  cent. ;  and  of  the  amount  of  exports  of  these 
articles  from  the  same  cities  New  York  exported  47.4  per  cent.;  Bos- 
ton exported  10.8  per  cent.  The  number  of  bushels  represented  by 
these  percentages  was,  for  New  York,  84,681,399;  for  Boston,  35.865,- 
063,  or  more  than  two  and  one-third  times  the  amount.  Other  articles, 
such  as  tobacco,  cheese,  bacon  and  hams,  beef  and  pork,  lard  and  tal- 
low, and  petroleum,  have  even  larger  disproportions,  and  the  general 
export  and  import  trade  of  the  two  cities,  as  some  indication  of  the 
relative  volume  of  railroad  traffic,  were  as  follows — 
For  the  fiscal  year  ending  June  30,  1886 : 

Domestic  exports  from  New  York $346,412,339 

"  Boston  53,429,513 

For  the  preceding  seven  years  the  exports  were  considerably  larger 
at  both  cities. 

For  the  fiscal  year  ending  June  30,  1886 : 

Imports  at  New  York .$434,548,789 

Boston 58,-552,702 

These  statistics  in  a  general  way  are  sufficient  illustrations  to  show 
that  the  difference  in  quantity  is  a  factor  of  large  importance. 

But  another  and  more  important  element  in  justification  of  the  dif- 
ferences in  favor  of  New  York  is  found  in  the  competition  that  centres 
there.  Besides  the  several  all-rail  lines  that  reach  New  York,  the 
Baltimore  and  Ohio,  the  Pennsylvania,  the  New  York,  Lake  Erie  and 
Western,  the  Delaware,  Lackawanna  and  Western,  the  West  Shore, 
and  others,  the  water  competition  by  way  of  the  Lakes,  Erie  canal,  and 
Hudson  river  is  alone  a  factor  of  so  much  force  as  to  compel  a  lower 
rate  to  New  York  than  perhaps  the  all-rail  carriers  would  be  willing 
to  accept  save  for  that  reason.  The  business  [456]  by  the  lakes  and 
canal  is  so  large  and  the  rates  so  low  that  the  rail  carriers  in  their  com- 
petition for  the  traffic  must  look  for  their  profits  to  the  bulk  of  the 
business  done  rather  than  to  the  rate  of  compensation  for  the  service 
renderecl.  The  tonnage  arriving  at  tide-water  at  New  York  hy  the 
Erie  canal  in  1886  was  3,215,177  tons,  of  which  1,525,901  was  from  the 
Western  States.  The  tonnage  going  from  tide-water  at  New  York  by 
the  Erie  canal  during  the  same  time  was  1,130,192  tons.     The  flour  and 


BOSTON  CHAMBER  COMMERCE  V.  L.  S.  &  M.  S.,  ET  AL.  129 

grain  alone  received  at  New  York  in  1886  by  canal  was,  in  bushels, 
43,835,077  ;  by  rail,  84,681,399. 

The  number  of  bushels  received  in  Boston  during  the  same  time,  by 
rail,  was  35,865,063,  or  about  eight  million  bushels  less  than  the  canal 
brought  to  New  York.  The  relative  percentages  at  New  York  were, 
by  canal,  17.06 ;  by  rail,  34 ;  coastwise,  9-10.  The  Boston  percentage 
of  the  whole  Avas  14.4. 

The  proportions  of  grain  received  at  New  York  during  seven  months, 
from  April  1  to  October  31,  1886,  were,  by  rail,  29,058,708  bushels; 
by  water,  36,919,555  bushels;  and  for  the  same  period  in  1887,  by  rail, 
27,721,262  bushels;  by  water,  37,772,000  bushels.  The  controlling 
force  and  importance  in  amount  of  the  competition  by  water  are  too 
obvious  to  require  comment. 

When  the  Erie  canal  .was  first  constructed,  opening  up  a  continuous 
waterway  from  the  West  to  New  York,  its  great  importance  and  pros- 
pective effect  upon  transportation  to  that  city  were  clearly  foreseen  by 
the  sagacious  business  men  of  Boston,  and  the  project  Avas  contemplated 
for  a  considerable  time  of  building  a  connection  with  the  Erie  canal  to 
Boston.  One  plan  was  considered  of  building  a  canal  over  the  Berk- 
shire Mountains ;  another  plan  was  to  tunnel  the  Iloosac  Mountain 
for  a  canal  where  the  railroad  tunnel  has  since  been  made.  But  these 
projects  were  abandoned  as  impracticable,  and  the  advantages  of  cheap 
and  direct  water  transportation  to  Boston  have  not  been  secured.  The 
mtluence  of  that  mode  of  competition  does  not  directly  affect  the  Bos- 
ton traffic  by  rail,  but  may  indirectly  benefit  Boston  in  the  general  low 
rates  to  seaboard  cities  made  necessary  by  the  canal  competition.  This 
absence  of  direct  Avater  competition  [457]  at  Boston,  and  the  existence 
of  it  at  NeAv  York,  are  phA^sical  facts  constituting  inequalities  Avhich 
the  carriers  by  rail  are  not  required  to  make  good  to  the  less  favored 
locality  at  their  OAvn  expense. 

The  fact  that  the  Boston  export  rates  and  the  coastwise  rates  east  of 
Portland  and  the  Avest-bound  rates  from  Boston  have  been  equalized 
Avitli  the  NeAv  York  rates  is  not  controlling  nor  even  important  upon 
the  question  of  the  reasonableness  of  the  Boston  local  rates. 

The  character  of  the  east-bound  and  west-bound  traflfic  differs  so 
materially  that  there  is  much  force  in  the  argument  that  the  Avest- 
bound  traffic  can  be  carried  at  loAver  rates  Avithout  serious  dispropor- 
tion in  the  aggregate  earnings  for  the  carriage  of  the  same  number  of 
tons  in  the  two  directions.  The  testimony  shows  that  over  70  per  cent, 
of  the  east-bound  traffic  consists  of  the  two  lower  classes  of  merchandise 
upon  which  the  lowest  rates  are  made,  viz.,  35  cents  and  30  cents,  re- 
spectively, per  hundredweight.  About  half  of  the  Avest-bound  traffic 
9 


130  ATLANTIC    PORT   DIFFERENTIALS 

I'rom  Boston  and  New  England  points  is  of  the  first,  second,  and  third 
classes,  upon  which  the  rates  are,  respectively,  75  cents,  65  cents,  and 
50  cents  per  hundredweight  to  Chicago,  and  on  that  basis  to  other 
western  points.  During  the  year  1887,  until  October  1,  35  per  cent, 
of  the  traffic  carried  west  by  the  Boston  and  Albany  road  was  of  the 
first  class. 

The  export,  coastwise,  and  west-bound  rates  have  long  been  conceded 
to  Boston,  by  the  carriers  competing  for  east-bound  business,  not  be- 
cause the  conditions  of  transportation  are  equal,  but,  under  the  de- 
mands of  the  laws  of  trade,  to  put  Boston  on  an  equality  with  com- 
petitors at  Baltimore,  Philadelphia,  New  York,  Montreal,  and  Portland 
in  reaching  common  markets  abroad  and  at  the  west.  That  Boston 
has  been  very  largely  benefited  by  the  concession  of  equality  with  New 
York  in  these  respects  cannot  be  doubted.  The  large  export  and  im- 
I)ort  business  and  the  heavy  shipments  to  the  west  of  imported  mer- 
chandise from  Boston  and  of  manufactures  of  various  kinds  from  dif- 
ferent points  in  New  England  along  the  line  of  the  Boston  and  Albany 
load  and  its  connections  show  the  great  advantages  to  Boston  of  these 
liberal  arrangements. 

[458]  But  like  concessions  were  not  made  to  the  Boston  local  rates 
from  the  West.  The  merchandise  shipped  to  Boston  at  the  higher 
rates  is  for  local  consumption.  There  is  no  competition  in  that  busi- 
ness from  other  localities.  It  is  enjoyed  exclusively  by  the  Boston 
merchants  and  traders,  and  there  is  no  reason  to  believe  that  the  con- 
sumption would  be  larger  or  the  prices  to  consumers  materially  less  if 
the  rates  were  on  a  par  with  those  to  New  York.  It  was  said  in  argu- 
ment, and  some  testimony  was  given  to  support  it,  that  the  sales  by 
Boston  merchants  to  certain  points  north  of  Boston  on  the  Massa- 
chusetts coast  had  fallen  off  to  a  considerable  extent  since  the  Act  to 
regulate  commerce  took  effect,  and  that  grain  from  New  York  is  car- 
ried to  those  points  by  water  and  sold  at  less  than  the  Boston  dealer 
can  afford  after  paying  local  rates  from  Boston  to  those  localities. 

This  is  the  only  evidence  in  the  case  tending  to  show  that  Boston  is 
in  any  way  injured  by  the  existing  rates ;  and,  as  there  was  opposing 
evidence  that  the  shipments  of  flour  and  wheat  to  Boston  from  the 
first  of  April  to  the  last  of  October,  1887,  was  in  excess  of  the  like  ship- 
ments during  the  corresponding  months  in  1886,  the  inference  that  the 
falling  off  in  shipments  of  corn  and  oats  is  due  to  the  rates  is  scarcely 
warranted,  and  a  doubtful  inference,  without  evidence  of  a  more  posi- 
tive character,  is  not  sufficient  to  justify  a  finding  of  prejudice  to  Bos- 
ton in  comparison  with  New  York  justly  attributable  to  the  rates. 


BOSTON  CHAMBER  COMMERCE  V.  L.  S.  &  M.  S.,  ET  AL.  131 

This  testimony,  therefore,  does  not  establish  the  unreasonableness  of 
the  rates  to  Boston, 

The  refusal  of  the  Boston  and  Maine  railroad  to  join  in  shipments 
from  Boston  to  those  places  on  the  basis  of  the  Boston  rate  makes  nec- 
essary an  additional  local  charge  over  that  road,  and  the  grain  carried 
to  those  towns  by  water  from  New  York  is  presumably  grain  borne  at 
low  rates  over  the  Erie  canal,  for  which  the  rail  carriers  are  in  no  way 
responsible. 

The  average  earnings  of  the  line  of  the  defendant  carriers  per  ton 
per  mile  from  Chicago  to  Boston  for  merchandise  of  the  sixth  class,  at 
the  Boston  local  rate  of  30  cents  per  hundredweight,  is  5%  mills.  This 
is  as  low  as  the  rate  of  any  other  rail  carrier  between  the  same  points 
and  as  low  as  has  [459]  ever  been  charged  in  the  absence  of  rate  wars. 
The  average  per  ton  per  mile  earnings  of  the  line  of  the  Lake  Shore  and 
New  York  Central  roads  for  the  same  class  of  merchandise  from 
Chicago  to  New  York  at  the  rate  of  25  cents  per  hundredweight  is 
548-1000  mills,  being  the  difference  of  about  6-10  of  a  mill.  In  view 
of  the  difference  in  the  circumstances  and  conditions  of  the  traffic  to 
the  two  cities,  this  discrepancy  does  not  appear  to  be  unreasonable  or 
unjust. 

The  point  is  made  that  the  differences  in  the  New  York  and  Boston 
rates  are  fixed  sums — usually  called  arbitraries — of  10  cents  per  hun- 
dredweight for  the  first  two  classes  and  5  cents  per  hundredweight  for 
the  four  other  classes,  and  that  these  are  not  founded  on  an  exact 
mathematical  basis  and  do  not  change  in  amount  if  rates  rise  or  fall. 
It  is  not  perceived  that  there  is  any  importance  in  this  circumstance. 
The  term  "arbitrary"  applied  to  rates  in  railroad  phraseology  implies 
no  alarming  significance.  It  is  used  to  designate  some  rate  not  founded 
en  a  combination  of  other  rates  or  upon  a  percentage  theory  of  some 
general  rate.  It  maj^  be  and  frequently  is  lower  than  a  rate  established 
on  a  different  basis.  It  is  quite  as  likely,  therefore,  to  indicate  a 
favorable  as  an  unfavorable  rate,  INIathematical  precision  in  the  ad- 
justment of  rates  is  not  always  attainable  nor  necessary,  and  if  the 
differences  are  not  in  fact  unreasonable  it  cannot  be  material  whether 
they  are  arrived  at  hy  one  mode  or  another,  and  while  the  custom  of 
arbitraries  or  fixed  differences  may  not  be  an  ideal  method  it  is  simpler 
than  fluctuating  percentages,  and  so  long  as  it  is  fair  and  equitable  it  is 
amenable  to  no  valid  objection.  The  differences  between  New  York 
and  other  competing  cities  are  also  fixed  sums  or  arbitraries ;  at  Phila- 
delphia and  Montreal  two  cents  per  hundredweight  lower  on  all  classes, 
and  at  Baltimore  three  cents  per  hundredweight  lower  on  all  classes. 
The  fact  of  a  fixed  difference  in  rates  to  the  seaboard  cities  is  not 
peculiar,  therefore,  to  New  York  and  Boston. 


132  ATLANTIC    PORT   DIFFERENTIALS 

The  existence  of  two  depots  for  the  Boston  and  Albany  road  at  its 
eastern  terminus,  one  for  Boston  local  business  and  the  other  for  ex- 
port business  at  East  Boston,  with  a  haul  six  miles  longer  than  to  the 
local  depot,  is  not  entitled  [460]  to  prominence  upon  the  questions 
under  consideration.  Both  are  for  the  same  road  and  for  the  same 
city,  and  for  the  better  accommodation  of  the  business  for  which  they 
are  designed,  like  the  three  or  four  depots  of  the  New  York  Central 
road  at  New  York  City,  some  of  which  are  nearly  as  far  apart  as  those 
at  Boston.  As  the  East  Boston  depot  is  reached  b,y  a  branch  from 
the  main  stem  of  the  road,  it  may  be  regarded  in  some  respects  as  a 
different  line ;  or,  in  view  of  the  haul  from  Chicago  and  the  circum- 
stances of  the  case,  it  may  with  reason  fall  under  the  maxim  '"de  mini- 
Mis  non  curat  lex." 

The  existing  rates  from  Chicago  and  other  western  points  to  the 
seaboard  cities  have  not  been  established  capriciously  nor  reached  hy 
gentle  and  harmonious  methods.  They  are  the  result  of  many  years  of 
contention  and  struggle,  involving  ruinous  rate  wars  between  the  dif- 
ferent lines  and  repeated  and  protracted  negotiations,  in  which  con- 
cessions were  necessary  to  arrive  at  an  adjustment,  finally  cuhninating 
in  the  creation  of  a  board  or  tribunal  in  which  all  the  lines  were  repre- 
sented for  the  settlement  of  disputes  and  the  maintenance  of  peace 
and  stability'.  The  history  of  these  contentions  and  their  effects  upon 
the  roads  and  upon  business  is  one  of  the  most  interesting  chapters  in 
the  record  of  railroad  development  in  this  country.  Beginning  with 
eager  rivalry  and  each  line  making  rates  independently  and  always 
with  the  view  of  securing  the  largest  possible  amount  of  business  for 
itself,  the  differences  to  Baltimore  and  Philadelphia  against  New  York 
were  so  great  that  wars  were  inevitable,  and  after  most  serious  losses 
liad  been  sustained  and  transportation  demoralized,  self-preservation, 
as  well  as  the  general  public  interests,  required  that  destructive  hostili- 
ties should  cease  and  agreements  be  brought  about  on  some  basis  of 
common  justice  and  comparative  equitj' .  After  several  unsuccessful 
experiments  the  present  basis  of  rates  to  the  seaboard  cities  was  estab- 
lished. 

While  by  these  adjustments  the  rate  from  Chicago  to  New  York 
forms  the  basis  with  relation  to  which  the  whole  system  is  arranged, 
that  rate  is  in  fact  the  one  accepted  by  the  shortest  line,  which  is  the 
line  by  the  Pennsylvania  road  and  [461]  its  connections,  and  the  other 
lines  must  conform  to  it  in  order  to  share  in  the  business.  It  tlius  re- 
sults that  all  the  lines  to  New  York  carry  at  the  same  rates ;  and  by  an 
extension  of  the  same  principle  all  lines  to  Boston  carry  at  the  same 
Boston  rates.     The  seaboard  rates  are,  therefore,  all  parts  of  a  large 


BOSTON  CHAMBER  COMMERCE  V.  L.  S.  &  M.  S.,  ET  AL.  133 

and  complicated  system,  and  their  relations  and  interrelations  are  such 
that  any  material  change  in  one  rate  involves  numberless  other  changes. 
It  vi^as  stated  in  the  testimony  that  a  reduction  of  the  east-bound  Bos- 
ton local  rate  to  the  level  of  the  New  York  tariff  would  require  cor- 
responding changes  at  several  thousand  other  points  in  New  England 
and  at  the  west,  and  that  the  New  England  towns  not  on  the  direct 
line  of  the  Boston  and  Albany  road,  but  reached  by  its  connections  and 
now  sharing  the  Boston  rates,  might  lose  their  present  advantages.  The 
necessity  for  other  changes  in  respect  to  related  rates  is  not  in  itself 
an  adequate  reason  for  declining  to  correct  any  specific  rate  if  it  is 
in  fact  wrong,  but  when  other  changes  would  follow  which  might  be 
injurious  to  other  localities  they  are  proper  to  be  considered  with  refer- 
ence to  the  general  effect  that  might  be  produced  by  the  proposed 
change,  especially  when  a  reasonable  doubt  of  its  propriety  exists. 

In  1882,  when  substantia Ih^  the  present  differences  in  rates  to  the 
several  Atlantic  ports  were  in  force  and  shortly  after  a  fierce  war  had 
existed,  a  disinterested  commission  of  three  gentlemen  was  chosen  by 
the  different  roads  to  consider  and  arbitrate  the  differential  rates  to 
the  principal  seaboard  points.  After  taking  much  testimony  and  giv- 
ing ample  consideration  to  the  subject  the  commission  made  an  elabo- 
rate report,  discussing  at  length  the  different  principles  urged  as 
foundations  for  the  differentials,  viz.,  distance  or  mileage  cost  of  serv- 
ice, and  competition,  concluding  that  competition  must  be  regarded 
as  the  only  practicable  principle  on  which  the  differences  could  be 
fairly  adjusted  and  that  no  reason  appeared  for  changing  the  differ- 
ences then  existing. 

It  is  proper  to  say  that  Boston  was  not  represented  upon  the  hear- 
ings before  that  commission,  and  the  Boston  differentials  were  not, 
therefore,  directly  involved,  although  the  principles  discussed  applied 
equally  to  Boston  with  the  other  points. 

[462]  The  preceding  discussion  has  been  chiefly  limited  to  the  re- 
lation of  the  carriers  to  the  transportation  in  question.  The  com- 
plaint is  against  the  carriers  and  they  only  have  appeared.  Tlie  busi- 
ness interests  of  New  York  have  not  been  heard ;  but  a  (luestioii  of  this 
nature  has  broader  aspects  than  the  interests  and  duties  of  the  railroad 
carriers.  The  business  interests  of  the  city  of  New  York  are  entitled 
to  fair  consideration,  and  those  interests  should  not  be  disregarded  in 
passing  upon  transportation  questions  in  which  that  city  has  large  con- 
cern. 

The  geographical  situation  of  New  York,  its  unrivaled  harbor,  with 
many  miles  of  available  water  front  and  wharves,  its  vast  concentra- 
tion and  variety  of  business,  its  greatly  superior  ocean  service,  its  loea- 


134  ATLANTIC    PORT    DIFFERENTIALS 

tion  as  the  terminus  of  water  transportation  from  the  west  and  of  many 
great  competing  railroad  lines,  its  capacity  for  storage  and  its  ter- 
minal facilities,  its  acknowledged  commercial  pre-eminence  give  un- 
doubted advantages  to  that  city,  partly  natural  and  partly  the  result 
of  enterprise  and  State  expenditure,  to  which  it  is  justly  and  equitably 
entitled  and  which  it  would  be  an  indefensible  wrong  to  attempt  to 
take  away  or  neutralize. 

No  invidious  comparison  with  any  other  city  is  intended,  but  un- 
deniable facts  cannot  be  ignored  when  a  question  of  rights  between 
competing  localities  is  under  consideration. 

In  view  of  the  relative  situation,  competing  transportation  facilities, 
and  natural  and  conunercial  advantages  of  the  two  cities  it  would  seem 
unnatural  and  repugnant  to  equity  that  the  carriers  delivering  prop- 
erty to  them,  respectively,  should  be  compelled  to  make  to  both  an 
equality  of  rates. 

The  conclusion  of  the  Commission  is  that  the  petitioners  have  not, 
upon  an}-  legitimate  grounds  of  rate-making,  maintained  their  applica- 
tion for  equality  of  rates  with  New  York  for  east-bound  local  shipments 
to  Boston,  and  that  the  existing  rates,  of  which  complaint  is  made,  have 
not  been  shown  to  be  unjust  or  unreasonable  in  themselves  or  rela- 
tively, and  the  petitioners  have  not  shown  unjust  discrimination  against 
Boston  and  in  favor  of  New  York  by  reason  of  those  rates. 

The  several  complaints  must,  therefore,  be  dismissed. 

Walker  and  Morrison,  Commissioners: 

Agreeing  in  general  with  the  foregoing  opinion  and  concurring  in 
the  result,  we  are  unwilling  to  be  considered  as  assenting  to  the  views 
above  expressed  in  respect  to  the  use  of  an  "arbitrary"  in  fixing  the 
Boston  rate. 

It  appears  from  the  agreed  statement  of  facts  that ' '  the  extra  charge 
of  10  cents  per  hundred  pounds  in  the  case  of  the  first  two  classes  and 
of  5  cents  per  hundred  in  the  other  classes  of  merchandise  for  trans- 
portation from  Chicago  to  Boston  over  the  charges  for  the  transporta- 
tion of  the  same  merchandise  from  Chicago  to  New  York  is  an  extra 
fixed  charge  or  '  arbitrary '  which  has  for  many  years  been  added  to  the 
New  York  rate  in  fixing  the  Boston  rate  without  reference  to  what  the 
rate  to  New  York  might  be ;  so  that,  for  illustration,  when  in  past  times 
the  through  rate  for  the  transportation  of  flour  and  grain  from  Chi- 
cago to  New  York  was  50  cents,  and,  again  when  it  was  only  15  cents, 
the  through  rate  to  Boston  for  the  same  class  of  goods  at  the  same  time 
was  in  each  case  just  5  cents  more — i.  e.,  55  cents  and  20  cents,  respec- 
tively." 


BOSTON  CHAMBER  COMMERCE  V.  L.  S.  &  M.  S.,  ET  AL.  135 

An  arbitrary  of  5  cents  per  hundred  is  10  per  cent,  of  a  50-cent  rate 
and  20  per  cent,  of  a  25-eent  rate.  Tlie  same  proof  which  might  show 
that  this  arbitrary  was  just  when  the  New  York  sixth-class  rate  was 
50  cents  would  demonstrate  that  it  is  unjust  now.  No  facts  have  been 
shown  which  would  justify  a  doubled  disparity  at  one  time  as  com- 
pared Avith  another. 

It  further  appears  that  the  Chicago  arbitraries  of  10  cents  on  the  two 
upper  classes  and  5  cents  upon  the  remainder  are  enforced  on  business 
consigned  to  Boston  from  all  points  west  of  Buffalo,  while  at  Buffalo 
the  amount  of  the  addition  is  summarily  reduced  one-half. 

The  propriety  of  somewhat  higher  rates  from  the  west  to  Boston  than 
to  New  York  cannot  properly  be  questioned,  but  the  method  pursued 
by  the  carriers  in  ascertaining  the  amount  of  cliiferenee  is  crude  and 
unsatisfactory.     The  result  is  well  named  an  "arbitrary." 

The  difference  originally  established  seems  to  have  been,  at  the  time, 
an  advance  of  about  10  per  cent,  in  the  rates  to  [464]  Boston  over  the 
rates  to  New  York,  both  from  Chicago  and  from  Buffalo.  The  facts 
fairly  warranted  a  difference  represented  by  that  relative  proportion, 
and  it  is  hard  to  find  substantial  reasons  for  any  greater  distinction 
than  that.  No  subsequent  events  have  occurred  which  are  claimed  to 
have  changed  the  situation  to  the  prejudice  of  Boston.  The  proofs, 
however,  fail  to  show  the  precise  class  rates  which  were  in  force  at  the 
lime  when  the  arbitrary  was  adopted. 

An  attempt  was  then  made  to  ascertain  a  just  measure  of  disparity 
from  natural  or  other  causes,  and  to  apply  the  same  to  rates  which  were 
expected  to  fluctuate  in  the  future.  A  percentage  basis  avouIcI  have 
been  and  would  now  be  a  much  more  satisfactory  and  trustworthy 
method  than  the  one  which  was  adopted.  Such  a  basis  is  easy  of  cal- 
culation ;  it  could  be  applied  without  difficulty  and  with  apparent  jus- 
tice at  Chicago  and  all  other  trunk-line  western  points,  from  which  the 
rate  to  New  York  is  now  a  stated  percentage  of  the  rate  from  Chicago 
to  New  York ;  and  it  would  in  great  measure  efface  the  elements  of  in- 
justice which  the  complainants  perceive  in  the  workings  of  the  present 
system. 


THE  TOLEDO  PRODUCE  EXCHANGE,  ET  AL. 

V. 

THE  LAKE  SHORE  &  MICHIGAN  SOUTHERN  RAILWAY  COM- 
PANY, ET  AL. 

EDWARD  KEMBLE 

V. 

THE  LAKE  SHORE  &  MICHIGAN  SOUTHERN  RAILAVAY  COM- 
PANY, ET  AL. 

5  I.  C.  C.  166. 


137 


THE  TOLEDO  PRODUCE  EXCHANGE,  ET  AL. 

V. 

THE  LAKE  SHORE  &  MICHIGAN  SOUTHERN  RAILWAY  COMPANY,  ET  AL. 

EDWARD  KEMBLE 

V. 

the  lake  shore  &  michigan  southern  railway  company,  et  al. 

Decided  April  6,  1892. 

(5  I.  C.  C.  166.) 

On  complaints  of  unreasonable  and  discriminating  rates  from  Chicago  and  other 
western  points  to  Boston,  produced  by  the  addition  to  rates  from  the  same  points 
to  New  York  of  a  so-called  arbitrary  or  differential  of  10  cents  on  first  class  ar- 
ticles, 6  cents  on  goods  of  the  second  class  and  5  cents  on  the  other  classes  of  freight, 
and  which  also  involved  the  propriety  of  combination  rates  through  intermediate 
points,  the  divisions  of  through  rates  between  the  carriers,  and  the  relation  of 
lighterage  charges  in  New  York  harbor  to  the  rates  in  question ;  Held,  That  the 
question  involved  herein  is  the  through  rates  as  affected  by  the  arbitrary  differ- 
ential, and  divisions  of  the  through  rate  accruing  to  the  different  roads  need  not 
be  considered,  nor  are  possible  rate  combinations  properly  comparable  with  the 
through  rate,  except  for  limited  purposes.  That  it  can  make  no  difference  to  tlie 
shipper  or  the  public  how  carriers  adjust  between  themselves  the  expense  of 
lighterage  paid  out  of  the  through  rate  to  New  York.  That  the  arbitrary  dif- 
ferentials now  charged  are  unlawful  and  should  hereafter  be  made  by  adding  a 
percentage  to  the  New  York  rate  on  shipments  included  in  the  six  classes  of  freight 
from  Chicago  and  points  east  thereof  and  west  of  Buffalo  to  Boston  and  other 
New  England  points,  and  that  the  defendants  and  other  carriers  interested  be  al- 
lowed twenty  days  to  show  cause  by  answer  why  order  should  not  issue  commanding 
them  to  desist  from  charging  said  arbitrary  differentials  and  requiring  said  rates 
to  Boston  and  New  England  points  to  be  made  by  adding  to  the  New  York  rate  an 
increase  of  ten  per  cent,  thereof,  and  if  no  such  answers  be  filed  that  such  order  be 
issued  forthwith. 


Denison  B.  Smith,  for  Toledo  Produce  Exchange,  etc. 

Edivard  Kemhle,  in  person. 

George  C.  Greene,  for  L.  S.  &  M.  S.  Ry.  Co. 

Frank  Loomis,  for  N.  Y.  C.  &  H.  E.  R.  R.  Co. 

Samuel  Hoar,  for  B.  &  A.  R.  R.  Co. 

Ashleij  Pond,  for  M.  C.  R.  R.  Co. 

Note  :  Only  so  much  of  the  opinion  as  is  germane  to  the  subject 
OP  Atlantic  Port  Differentials  is  reproduced. 

McDiLL,  Commissioner : 

The  complaint,  first  named.  No.  188,  was  filed  April  1,  1889.     While 
it  names  only  the  parties  above  written  as  defendants,  it  complains 

139 


140  ATLANTIC    PORT   DIFFERENTIALS 

against  all  eastern  trunk  railwa3\s  making  freight  rates  from  western 
points  to  Boston,  and  points  in  New  England  having  rates  based  on 
the  Boston  rate,  and  especially  it  complains  of  the  Lake  Shore  &  i\Iichi- 
gan  Southern,  and  the  other  roads  named  as  defendants,  and  states  as 
the  basis  of  the  complaint,  the  differential  charge  of  five  cents  per  100 
pounds  on  3d,  4th,  5th  and  6th  class  freight,  and  of  ten  cents  per  100 
pounds  on  first  and  second  class  freight,  from  all  western  points  to 
Boston,  and  Boston  points,  above  rates  on  same  classes  from  western 
points  to  New  York.  It  is  charged  that  the  Lake  Shore  &  Michigan 
Southern  Railway,  the  Michigan  Central  Railroad,  the  New  York  Cen- 
tral Railroad,  and  the  Boston  &  Albanj'  Railroad,  while  making  this 
differential  charge  of  five  cents  per  one  hundred  pounds  are  also  con- 
nected in  traffic  arrangements,  and  make  continuous  lines  with  the  Con- 
necticut River,  the  Providence  &  Worcester  and  other  roads,  as  well  as 
the  Boston  &  Albany,  and  that  they  only  make  and  charge  from  Buffalo 
to  Boston  and  Boston  points  a  differential  of  2i/2  cents  per  one  hundred 
pounds  over  the  rate  made  and  charged  from  Buffalo  to  New  York, 
on  all  classes  of  freight  below  second  class,  and  especially  is  this  com- 
plaint made  as  to  the  sixth  class  which  includes  grain  and  flour. 

As  a  specification  of  the  result  of  the  rate-making  complained  of  the 
following  are  given,  being  combination  rates : 

Rate  from  Danville,  111.,  to  Toledo  and  Detroit  is  per  100 

pounds  10      cents 

Toledo  to  Boston  &  New  England 24yo    " 

341/2    '' 

Rate  from  Danville,  111.,  to  Buffalo 15      cents 

Buffalo  to  Boston  &  New  England 15yo    " 


301/2    " 


[169]  April  26,  1889,  the  Lake  Shore  &  Michigan  Southern  Rail- 
way and  Michigan  Central  Railroad  answered,  claiming  that  the  com- 
plaint, in  the  facts  stated  therein  shows  nothing  done  by  either  of  the 
companies  in  contravention  of  the  Act  to  Regulate  Commerce ;  that  all 
joint  and  through  tariffs  established  or  rates  charged  by  said  companies 
respectively  with  the  New  York  Central  &  Hudson  River  Railroad  Com- 
pany and  the  Boston  &  Albany  Railroad  Company  since  April  7,  1887, 
from  Chicago  and  other  western  points  to  Boston  and  Boston  points 
liave  been  duly  published,  and  filed  with  the  Interstate  Commerce  Com- 
mission, and  such  rates  and  charges  are  and  have  been  just  and  rea- 
sonable, and  not  unjustly  discriminative  against  any  description  of 
traffic,  nor  against  any  person,  firm,  corporation  or  locality,  thereby 
bringing  about  any  undue  or  unreasonable  prejudice. 


TOLEDO  PRODUCE  EXCHANGE  V.  L.  S.  &  M.  S.  RY.  CO.  141 

Deny  that  respondents  are  associated  together  as  one  line  of  road, 
in  making  and  charging  the  differential  from  Buffalo  east,  or  that  they 
are  party  to  any  arrangement  by  which  a  differential  from  l^nft'alo  to 
Boston  and  Boston  points  of  only  two  and  one-half  cents  jiei-  hundred 
pounds,  is  charged  over  New  York  rates,  on  classes  of  freight  below 
second  class.  Deny  that  at  New  York  there  is  a  terminal  charge  of 
three  cents  from  western  points;  allege  that  circumstances  and  con- 
ditions exist  which  render  a  higher  through  rate  from  points  on  the 
Lake  Shore  &  Michigan  Southern,  and  IMichigan  Central  roads,  to 
Boston  and  New  England  points  which  take  Boston  rates,  than  to  New 
York  just,  proper  and  reasonable.  That  some  of  such  circumstances 
are  clearly  and  truthfully  stated  in  the  report  and  opinion  of  the  In- 
terstate Commerce  Commission  in  the  matter  of  the  Boston  Chamber  of 
Commerce  against  The  Lake  Shore  &  Michigan  Southern,  The  New 
York  Central  &  Hudson  River  and  the  Boston  &  Albany  Railroad  Com- 
panies, decided  February  15,  1888,  which  report  and  opinion  and  the 
facts  and  conclusions  therein  contained  are  made  a  part  of  the  answer. 

On  the  -tth  of  I\lay,  1889,  The  New  York  Central  &  Hudson  River 
Railroad  Company  and  the  Boston  &  Albany  Railroad  Company  jointly 
answered  that  the  complaint  did  not  show  that  anything  had  been  done 
by  either  of  them  in  contraven  [170]  tion  of  the  Act  to  Regulate  Com- 
merce. That  all  joint  through  tariffs  made  since  April  7,  1887,  have 
been  duly  published,  and  filed  with  the  Interstate  Commerce  Commis- 
sion, and  the  rates  and  charges  thereunder,  are  just  and  reasonable, 
not  unjustly  discriminative,  and  do  not  subject  any  particular  person, 
firm,  corporation  or  locality  to  any  undue  or  unreasonable  prejudice  or 
disadvantage  in  any  respect  whatever;  nor  do  they  bring  to  anyone 
an  undue  or  unreasonable  preference  or  advantage. 

Deny  any  association  together  of  the  roads  named  to  charge  the  dif- 
ferential charged  to  Boston,  over  that  charged  to  New  York,  but  allege 
that  tariffs  have  been,  from  time  to  time,  filed  and  published,  and  ob- 
served, containing  the  differential,  and  making  rates  which  are  just 
and  reasonable,  not  unjustly  discriminative,  neither  giving  undue 
preference  or  advantage,  nor  subjecting  anyone  to  undue  prejudice  or 
disadvantage.  Deny,  that  out  of  all  rates  from  western  points  to  New 
York  there  is  taken  a  terminal  charge  of  three  cents  per  100  pounds. 

Allege  that  circumstances  and  conditions  exist  which  justify  the  dif- 
ferential, some  of  which  are  set  forth  in  the  report  and  opinion  of  the 
Interstate  Commerce  Commission,  cited  by  the  other  defendants,  being 
the  case  of  Boston  Chamber  of  Commerce  against  a  part  of  these  de- 
fendants, which  report  and  opinion,  facts  and  conclusions,  are  set  forth 
as  part  of  its  answer. 


142  ATLANTIC    PORT   DIFFERENTIALS 

June  7,  1889,  complainants  filed  an  amended  complaint  which  sub- 
stantially is  the  same  as  the  original  complaint  in  all  material  and 
pertinent  allegations. 

To  this  amended  complaint  answers  were  filed  as  follows :  The  Lake 
Shore  &  Michigan  Southern  Railway  Company,  June  24,  1889.  The 
New  York  Central  &  Hudson  River  Railroad  Company  and  Boston  & 
Albany  Railroad  Company  July  12,  1889,  but  no  new  issues  are  raised 
by  the  amended  complaint  and  answers. 

At  a  session  of  the  Interstate  Commerce  Commission  held  at  Toledo, 
Ohio,  May  24,  1889,  the  Detroit  Board  withdrew  from  the  complaint 
and,  being  permitted  so  to  do,  ceased  from  that  time  to  be  a  party  com- 
plainant. 
************ 

On  the  8th  September,  1891,  Mr.  Smith  enclosed  memorials  of  the 
Board  of  Trade  of  the  city  of  Detroit,  the  Produce  Exchange  of  Toledo, 
and  on  October  7,  1891,  the  memorial  of  the  Millers'  National  Asso- 
ciation of  the  United  States,  Milwaukee,  Wisconsin;  also  memorials 
of  the  Board  of  Trade  of  Hartford,  Conn.,  Providence,  R.  I.,  Indiana- 
polis, Ind.,  The  Omaha  Commercial  Association  and  the  Board  of 
Trade  of  the  city  of  Peoria.  They  all  ask  an  order  forbidding  the 
further  imposition  of  this  differential  on  all  articles  in  class  six  of  the 
railway  freight  association  and  claim  that  whatever  potent  reasons  may 
have  existed  in  time  past  for  the  differential  under  present  conditions 
they  have  entirely  lost  their  force  and  validity. 

That  neither  adverse  grades  nor  curves  nor  distances  in  New  England 
justify  such  additional  charges. 

That  while  originally  the  added  rate  must  have  been  given  to  the 
New  England  roads,  now  it  is  pro-rated  from  the  west  to  points  of 
destination,  and  thus  the  railways  are  charging  this  freight  on  pre- 
cisely the  same  commodities  to  Boston  from  the  same  points  in  the  same 
trains  in  excess  of  the  rate  to  New  York  and  other  points. 

The  Commission  is  thus  brought  to  consider  the  case  upon  a  record 
of  rather  doubtful  character  as  to  the  evidence  adduced,  but  upon  con- 
sideration, and  for  reasons  hereafter  given,  are  led  to  believe  that  the 
record,  as  it  now  stands,  presents  sufficient  to  enable  an  intelligent  an- 
swer to  the  inquiry  raised  by  the  complaint,  Avhich  is,  whether  or  not 
the  arbtrary  differential  in  rates  between  Boston  and  New  York  is 
reasonable  and  just,  and  whether  it  gives  any  undue  preference  or  ad- 
vantage to  any  particular  locality,  and  whether  it  is  unjustly  discrimi- 
native. 

In  No.  251,  Edward  Kemhle  v.  The  Lake  Shore  &  Michigan  Southern 
Railway  Company,  The  New  York  Central  &  Hudson  River  Railroad 


TOLEDO  PRODUCE  EXCHANGE  V.  L.  S.  &  M.  S.  RY.  CO.  143 

Company,  and  The  Boston  d-  Allxnty  [173]  Railroad  Company,  the 
same  or  a  similar  question  is  involved. 

This  complainant  alleges  that  he  is  located  at  Boston,  IMass.,  carrying 
on  the  grain  and  tiour  business  under  the  firm  name  of  Kemble  &  Hast- 
ings. 

That  the  roads  named  as  defendants  by  joint  arrangement  form  con- 
tinuous lines  from  Chicago  to  New  York  City  or  from  Chicago  to  Bos- 
ton via  Albany;  the  Lake  Shore  &  Michigan  Southern  from  Chicago, 
Illinois,  to  Buffalo,  N.  Y.,  a  distance  by  its  line  of  538  miles,  the  New 
York  Central  extending  from  Buffalo  to  Albany  301  miles  and  thence 
to  New  York  City  145  miles  and  the  Boston  &  Albany  from  Albany, 
N.  Y.,  to  Boston,  Mass.,  201  miles.  That  ever  since  April  5,  1887,  the 
defendants  have  been  engaged  in  transporting  flour  and  grain  by  a 
continuous  carriage  from  Chicago  to  New  York  City  and  also  to  Bos- 
ton, and  are  subject  to  the  Interstate  Commerce  Law. 

That  great  quantities  of  flour  and  grain  go  from  Buffalo  to  New 
York  and  other  great  quantities  from  Buft'alo  to  Boston,  but  as  to  each 
the  transportation  thereof  l)y  the  Lake  Shore  &  iMichigan  Southerii 
Railway  is  and  has  been  a  like  and  contemporaneous  service  of  a  like 
kind  of  traffic  under  substantially  similar  circumstances  and  conditions. 

That  as  to  all  these  shipments  from  Chicago  to  Buffalo  and  thence  to 
Boston  the  rates  are  and  have  been  unjust,  unreasonable  and  unjustly 
discriminating. 

That  the  rate  per  hundred  pounds  and  the  rate  per  carload  to  Buffalo 
on  Boston  bound  flour  and  grain,  has  exceeded  the  rate  over  the  Lake 
Shore  t&  IMichigan  Southern  Railway  on  New  York  bound  flour  and 
grain  over  the  same  road,  2  cents  per  hundred  pounds  and  about  six 
dollars  per  carload. 

That  it  cost  no  more  to  ship  flour  and  grain  from  Chicago  to  Buffalo 
when  Boston  bound  than  when  New  York  bound.  That  the  continuous 
through  rate  from  Chicago  by  defendant's  line  to  New  York  is  25  cents 
per  100  pounds,  or  seventy-five  dollars  per  carload  of  30,000  pounds, 
while  to  Boston  the  rate  is  30  cents  per  hundred  pounds,  or  ninety  dol- 
lars per  carload  of  30,000  pounds,  and  of  this  excess  the  [174]  Lake 
Shore  &  Michigan  Southern  Railroad  receives  about  six  dollars  per  car- 
load, for  no  extra  service  whatever. 

That  three  cents  per  hundred  pounds  is  deducted  from  New  York 
rate  for  lighterage,  so  that  said  IMichigan  Southern  road  receives  $36.08 
for  hauling  the  New  York  car,  and  at  the  same  time  receives  $46.56  for 
hauling  the  Boston  car. 

That  the  charge  from  Chicago  and  other  points  west  of  Buffalo  and 
between  Chicago  and  Buffalo  to  Buffalo,  is  not  made  to  depend  upon 


144  ATLANTIC    PORT   DIFFERENTIALS 

cost  and  other  legitimate  circumstances  and  conditions,  but  upon  the 
ultimate  destination,  whether  New  York  or  Boston.  That  the  fore- 
going rates  are  contrary  to  the  Interstate  Commerce  Law,  and  espe- 
cialh^  in  contravention  of  the  first,  second,  and  third  sections  thereof; 
and  prays  an  order  restraining  the  roads  from  doing  the  acts  alleged. 

February  7,  1890,  the  Boston  &  Albany  Railroad  answered,  referring 
to  and  making  its  answer  in  the  cases  of  the  complaints  of  the  Boston 
Chamber  of  Commerce,  Nos.  61  to  63,  of  1887,  a  part  of  its  answer  in 
this  case. 

Also  alleges  that  Edward  Kemble,  the  petitioner  in  this  ease,  was  one 
of  the  committee  of  the  Boston  Chamber  of  Commerce  in  the  cases  above 
referred  to;  that  petition  being  filed  July  22,  1887,  and  appearing  in 
Interstate  Commerce  Reports,  vol.  1,  391.  That  on  page  754  of  said 
Report  is  found  the  decision  of  the  Commission  dismissing  the  petition. 

That  there  is  no  substantial  difference  between  the  complaints  set  out 
in  the  petitions  filed  in  these  cases  and  in  this  case  that  no  new  circum- 
stances are  alleged,  and  asks  that  the  complaint  be  dismissed. 

February  24,  1890,  the  New  York  Central  &  Hudson  River  Railroad 
Company  filed  its  answer,  declining  to  admit  petitioner's  statement  as 
to  petitioner's  occupation  and  the  name  of  his  firm. 

Alleges  that  the  line  of  the  Lake  Shore  &  Michigan  Southern  Rail- 
road extends  from  Chicago  to  Buffalo,  538  miles,  there  connecting  with 
respondent  from  Buffalo  to  New  York.  446  miles,  and  at  East  Albany 
and  by  the  Boston  &  Albany  Railroad,  201  miles,  to  Boston,  forming- 
continuing  and  connecting  lines  to  Boston  and  New  York  from  Chicago. 

[175]  Admits  that  since  April  5,  1887,  it  has  been  extensively  en- 
gaged in  the  transportation  of  fiour  and  grain  in  a  continuous  carriage 
thereof  from  Chicago  and  that  it  and  its  connecting  lines  are  subject 
to  the  provisions  of  the  Interstate  Commerce  Act". 

That  all  the  grain  and  flour  from  Chicago  to  Boston  and  New  York 
by  the  continuous  lines  formed  by  respondent  and  its  co-respondents 
has  passed  over  the  Lake  Shore  &  IMichigan  Southern  Railway,  whether 
to  Boston  or  New  York. 

Denies  all  other  allegations  of  the  petition  except  that  it  admits  that 
the  charge  from  Chicago  to  New  York  on  sixth  class  merchandise  is  25 
cents  per  one  hundred  pounds  or  seventy-five  dollars  per  carload  of 
30,000  pounds.  That  when  the  service  is  performed  three  cents  per 
hundred  pounds  for  lighterage  is  deducted  before  a  division  is  made 
of  the  earnings  for  the  continuous  haul  from  Chicago  or  other  points 
west  of  Buffalo;  that  the  charge  to  Boston  for  the  transportation  of 
sixth  class  merchandise  is  30  cents  per  hundred  pounds  or  ninety  dol- 
lars per  carload.     That  the  rate  on  sixth  class  merchandise  from  Chi- 


TOLEDO  PRODUCE  EXCHANGE  V.  L.  S.  &  M.  S.  RY.  CO.  145 

cago  to  Boston  carried  by  water  to  points  on  the  coast  east  of  Portland 
is  the  same  as  the  rate  from  Chicago  to  New  York.  Further  answering 
this  defendant  gives  as  reasons  for  the  difference  in  rates  from  Chicago 
to  Boston  as  compared  with  rates  from  Chicago  to  New  York  that  such 
difference  is  just  and  reasonable  by  reason  of  longer  distance  from 
Chicago  to  Boston,  increased  cost  of  service  from  East  Albany  to  Bos- 
ton, heavier  grades,  smaller  trains,  greater  number  of  engines,  larger 
expenditures  in  fuel  and  for  train  service,  longer  detention  of  ears, 
greater  volumes  of  business  to  New  York  than  to  Boston,  greater  stor- 
age facilities  in  New  York,  greater  competition  between  the  greater 
number  of  lines  of  railway  to  New  York,  competition  of  water  lines 
reaching  New  York ;  that  the  lesser  rate  to  points  on  the  coast  east  of 
Portland,  Maine,  is  just  and  reasonable  and  made  proper  and  necessarj'- 
by  reason  of  competition  of  rail  and  water  lines  reaching  those  points. 

That  all  these  matters  were  fully  proved  and  investigated  by  the 
Commission  in  the  complaint  No.  61  of  Boston  Chamher  of  domuicrce 
v.  These  Bespondents;  No.  62,  Same  v.  [176]  TJiis  Respondent,  and 
No.  63,  Same  v.  New  York  Central  &  Hudson  Rivrr  Railroad  ('ompanij. 
That  petitioner  was  the  chief  promotor  of  those  complaints,  verified 
the  petitions  and  should  be  estopped  by  the  opinion  and  decision  upon 
said  complaints. 

February  14,  1890,  the  Lake  Shore  &  INIichigan  Southern  Railroad 
filed  its  answer  substantially  similar  to  the  answer  of  the  New  York 
Central  road.     This  case  was  heard  at  Washington,  June  6,  1890. 

It  is,  and  for  many  j-ears  has  been,  the  custom  of  the  various  lines 
of  railway  leading  from  Chicago  and  other  points  between  Chicago  and 
Boston  and  west  of  Buffalo  to  make  the  Boston  rate  by  adding  to  the 
New  York  rate  an  arbitrary  [179]  additional  rate  styled  in  this  record 
a  differential  of  ten  cents  per  hundred  on  first  and  six  cents  per  hun- 
dred on  second  class  freight  and  five  cents  per  hundred  on  third,  fourth, 
fifth  and  sixth  class  freight. 

The  articles  of  flour  and  grain  are  in  the  sixth  class  and  subject  to  an 
arbitrary  differential  of  five  cents  per  hundred  pounds  to  Boston  as 
compared  with  New  York. 

This  differential  is  based  upon  the  greater  distance  to  Boston  from 
Chicago  and  other  western  points,  heavier  grades,  smaller  trains  neces- 
sitating increased  expenses,  the  train  service  and  other  conditions.  At 
the  time  the  differential  was  established  by  arbitration  the  rates  were 
much  higher  than  now,  and  as  rates  generally  have  lowered,  the  arbi- 
trary being  fixed,  the  percentage  has  risen  from  10  per  cent.  ii:iorease 
then,  to  20  per  cent,  now, 
10 


146  ATLANTIC    PORT    DIFFERENTIALS 

The  shipments  here  considered  from  Chicago  to  Boston  are  made 
over  the  lines  of  the  defendants,  namely :  from  Chicago  to  Buffalo  over 
the  Lake  Shore  &  Michigan  Southern  line ;  and  the  New  York  Central 
&  Hudson  River  Railroad  Company  from  Buffalo  (at  that  point  con- 
necting with  the  Lake  Shore  road),  to  Albany  on  the  Hudson  River, 
and  crossing  by  a  bridge  over  the  Hudson  River  to  East  Albany,  thence 
to  New  York  its  southern  terminus ;  it  also  connects  with  the  Boston 
&  Albany,  at  East  Albany,  and  freight  is  carried  on  the  latter  line  to 
Boston, 

The  length  of  haul  from  Chicago  to  Buffalo  via  Lake  Shore 
&  Michigan  Southern  is 538  miles 

From  Buffalo  to  East  Albany  via  the  New  York  Central  & 
Hudson  River  Railroad 301 

East  Albany  to  Boston  via  Boston  &  Albany 201      ' ' 


1040      " 

The  rate  from  Chicago  to  Boston  is  a  little  less  than  6  mills  per  ton 
per  mile. 

There  are  a  great  many  rail  routes  from  Chicago  to  Boston  made  up 
of  the  following  lines  : 

Michigan  Central  Railroad, 

Lake  Shore  &  IMichigan  Southern  Railway, 

Chicago  &  Grand  Trunk  Railway, 

Grand  Trunk  Railway, 

Chicago  &  Erie  Railroad, 

Pittsburgh,  Fort  Wayne  &  Chicago  Railway, 

Pittsburgh,  Cincinnati,  Chicago  &  St.  Louis  R.ailway. 

Pennsylvania  Railroad, 

Wabash  Railroad, 

New  York,  Chicago  &  St.  Louis  Railroad, 

New  York  Central  &  Hudson  River  Railroad, 

New  York,  Lake  Erie  &  Western  Railroad, 

West  Shore  Railroad, 

Delaware  &  Hudson  Railroad, 

Delaware,  Lackawanna  &  Western  R.  R., 

Canadian  Pacific  Railway, 

Canada  Atlantic  Railway, 

New  York,  New  Haven  &  Hartford  Railroad, 

New  York  &  New  England  Railroad, 

Rome,  Watertown  &  Ogdensburg  Railroad, 

Central,  New  England  &  Western  Railroad, 

New  York,  Providence  &  Boston  Railroad,  ,   ,    , 


TOLEDO  PRODUCE  EIXCHANGE  V.  L.  S.  &  M.  S.  RY.  CO.  147 

Fitehburg  Railroad, 

Boston  &  Albany  Railroad, 

Boston  &  Providence  Railroad, 

Central  Vermont  Railroad, 

Boston  and  Lowell  Division,  Boston  &  ]\Iaine  Railroad, 

Cheshire  Railroad, 

Boston  &  Maine  Railroad, 

These  lines  all  afford  to  their  shippers  the  same  rate  as  is  given  by  the 
respondents. 

The  rate  from  Chicago  to  New  York  and  Boston  on  the  several  classes 
of  freight  is  given  below. 

Class.  To  New  York.  To  Boston. 

1st  75  85 

2nd  65  71 

3d  50  55 

4th  35  40 

5th  30  35 

6th  25  30 

[181]  The  carload  rate  is  as  follows  on  flour  and  grain  (sixth  class) 
30,000  pounds  to  the  ear : 

Chicago  to  New  York $75 .  00 

Chicago  to  Boston 90 .  00 

The  method  of  division  of  the  through  rate  which  is  collected  as  a 
single  rate  from  the  shipper,  is  such  that,  on  a  car  of  flour  or  grain 
from  Chicago  to  Buffalo  bound  to  New  York,  the  share  or  allotment  of 
the  Lake  Shore  &  jMichigan  Southern  road  is  $41.00,  and  its  share  or 
allotment  for  a  similar  ear  to  Boston  is  $46.55. 

With  reference  to  all  goods  or  freight  originating  at  Buffalo  and 
destined  to  Boston  the  differential  is  2Y2  cents  per  hundred  and  not 
five  cents. 

The  lighterage  charges  on  shipments  to  New  York  and  East  Boston 
respectively  are  as  follows : 

To  points  in  New  York  harbor  other  than  New  York  Central  Rail- 
road Stations,  per  hundredweight  3  cents ;  to  East  Boston  for  export 
charges  per  bushel  as  follows : 

Via  Warren  Line V2  cent 

Other  Lines %  cent 

and  Wharfage  charge  of Mj  cent  per  bushel 

Lighterage  and  wharfage  charges  are  paid  by  the  carrier  and  de- 
ducted before  division  of  the  through  rate. 


148  ATLANTIC    PORT   DIFFERENTIALS 

The  Lake  Shore  &  Michigan  Southern  Road  earns  on  a  carload  of 
corn,  wheat  or  flour  to 

New  York $41 .  00 

To  Boston 46 .  56 

Difference $5.56 

On  a  carload  of  bacon  to  New  York $45 .  92 

To  Boston  49 .  66 

Difference $3.74 

A  carload  of  wheat  or  corn  from  Chicago  to  New  York,  30,000  pounds 
pays  $75. 

[182]   Divided  as  follows : 

]jake  Shore  &  Michigan  Southern $41 .  00 

New  York  Central 34. 00 

On  a  carload  of  wheat  or  corn  from  Chicago  to  Boston  rate  $90.00. 

The  Lake  Shore  earns $46 .  55 

The  New  York  Central 26.05 

The  Boston  &  Albany 17 .40 

The  receipts  of  grain  and  flour  at  New  York  from  April  1st  to  Oc- 
tober 31st  in  the  year  1886  were  as  follows: 

Grain  65,958,263  bushel 

Flour 3,206,008     " 

For  the  year  1887: 

Grain  65,492,262  bushel 

Flour 3,373,520     " 

The  bushels  of  flour  and  grain  received  at  Boston  during  the  year 
1886  were  35,865,063. 

Percentage  of  the  total  amount  of  grain  and  flour  received  at  the  six 
great  Atlantic  ports  respectively  by  New  York  and  Boston : 

At  New  York 52.5 

At  Boston 14.4 

New  York  exported  percentage 47.4 

Boston 10.8 

The  competitive  factors  operating  at  New  York  are  very  strong.  It 
is  the  chief  seaport  of  the  United  States.  There  great  numbers  of 
steamship  lines  concentrate.  It  is  the  preferred  port  for  all  vessels 
coming  to  the  United  States.  It  receives  in  the  season  of  navigation 
vast  quantities  of  freight  by  the  water  routes  and  all  rates  to  New 
York  are  the  result  of  a  fierce  and  constant  competition. 


TOLEDO  PRODUCE  EXCHANGE  V.  L.  S.  &  M.  S.  RY.  CO.  149 

It  is  evident  that  the  real  cause  of  complaint  in  each  of  the  cases  under 
consideration  is  the  arbitrary  differential  to  [183]  Boston  and  it  is 
claimed  that  it  is  excessive,  unreasonable  and  a  discrimination,  unjust 
find  hurtful  in  effect.  The  rate  to  New  York  has  been  fixed  by  sharp 
competition.  Its  great  natural  advantages  and  the  water  routes  which 
serve  it  in  the  transportation  of  products  have  not  been  sufficient  to 
keep  the  carriers  by  rail,  even  though  originally  built  to  serve  other 
Atlantic  cities,  from  agreeing  upon  a  common  rate  to  that  city  from 
all  points  which  enables  them  in  some  degree  to  share  the  profits  result- 
ing from  its  carrying  trade.  The  rate  from  Chicago  to  New  York  has 
becoine  the  basis  of  all  through  rates  to  other  eastern  from  western 
points.  No  attack  is  in  this  case  made  upon  that  rate  as  unreasonable. 
But  for  the  competition  above  mentioned  that  rate  would  probably  be 
higher.  Neither  shipper  nor  carrier  has  claimed  in  this  case  that  the 
New  York  rate  is  either  too  high  or  too  low.  It  has  come  to  be  the  fixed 
unchangeable  element  that  in  combination  with  other  sums  make  the 
entire  body  of  rates  now  under  consideration.  It  is  claimed  that  the 
necessity  of  competition  on  the  one  hand  and  a  due  regard  to  local  and 
other  claims  on  the  other  hand,  years  ago  brought  differential  rates  into 
existence  and  that  their  amount  has  been  determined,  after  a  most 
careful  study  of  distances,  cost  of  service,  differing  seaport  advantages, 
the  effect  of  water  competition,  and  all  the  other  circumstances  and 
conditions  which  experience  has  taught  practical  men  to  regard  as 
affecting  the  question  of  rates. 

It  is  apparent  that  the  New  York  rate  being  the  fixed  (|uantity  or 
base  of  every  rate  under  consideration  an  error  in  the  variabh'  (luantity 
will  produce  an  unreasonable  and  unjust  rate.  As  the  great  com- 
mercial advantages  of  New  York  are  distributed  and  granted  in  some 
measure  to  the  whole  country,  by  making  the  New  York  rate  tlie  basis 
of  all  rates,  so  by  an  imperfect  or  disproportionate  adjustment  of  thd 
amount  of  the  variable,  or  differential  the  place  affected  liy  the  particu- 
lar rate  may  be  deprived  of  some  portion  of  the  advantage  fairly  be- 
longing to  it  from  its  enjoyment  of  the  base  rate,  and  the  rate  to  that 
extent  become  excessive  and  unreasonable  to  that  locality.  So  it  seems 
that  w^iile  the  New  York  rate,  plus  the  differential,  may  produce  a  rate 
that  is  not  in  itself  unrea[184]sonable,  standing  alone,  and  not  con- 
templated in  its  relation  to  other  rates,  yet  the  question  of  the  reason- 
ableness of  the  rate  depends  upon  the  differential  being  fixed  at  a  just 
and  reasonable  percentage. 

In  the  case  of  the  Toledo  Produce  Exchange,  et  al.,  against  the  de- 
fendants the  specific  complaint  is  against  the  differential  charge  above 
the  New  York  rate  on  classified  freight  from  all  western  points  to  Bos- 


150  ATLANTIC    PORT    DIFFERENTIALS 

ton  and  Boston  points,  and  further  that  while  making  the  differential 
charge  of  five  cents  per  hundred  on  3-d,  4th,  5th,  and  6th  class  freight 
from  Chicago  to  Buffalo  the  differential  from  Buffalo  to  Boston  is  only 
2y2  cents.    No  explanation  of  this  latter  fact  which  seems  to  be  clearly 
established  by  the  evidence  has  been  aft'orded  by  any  of  the  witnesses, 
and  one  witness  at  least  who  showed  great  intelligence  and  long  experi- 
ence in  rate  making  frankly  admitted  that  he  was  incapable  of  giving 
any  good  reason  for  it.    Without  giving  too  much  importance  or  promi- 
nence to  the  fact,  it  may  be  noted  as  having  some  bearing  upon  the 
question  as  to  whether  the  long  established  Boston  differential  is  in 
excess  of  what  it  should  be.     While  Mr.  Kemble  in  his  complaint  at- 
tacks the  differential  on  the  ground  that  it  cannot  be  right  for  the  rea- 
son that  it  is  so  distributed  amongst  the  carriers  in  question  that  there 
is  awarded  or  divided  to  one  of  the  carriers  more  money  for  carrying 
the  same  kind  of  freight  in  the  same  train  in  the  same  direction  the 
same  distance  over  the  same  line  in  carloads  when  the  car  goes  to 
Boston  than  to  New  York  thus  giving  to  destination  the  force  of  a  cir- 
cumstance justifying  a  greater  charge  for  an  exactly  similar  service  and 
urges  that  the  differential  is  therefore  unjust  and  unjustly  discrimi- 
native, yet  it  is  evident  even  in  his  case  that  it  is  the  differential  that  he 
attacks.     In  the  case  of  the  Toledo  Produce  Exchange  and  others 
against  the  defendants  the  attack  is  directly  made  upon  the  differential 
and  upon  certain  combinations  of  rates  from  western  points  to  Buffalo 
and  thence  to  Boston.    As  to  the  report  of  the  case  of  The  Boston  Cham- 
ber of  Commerce  v.  The  Lake  Shore  &  Michigan  Southern  Bailway 
Company  and  others  {ante,  p.  113)  it  is  found  that  while  concurring  in 
the  result  reached  in  that  case  which  was  a  denial  to  Boston  of  equal- 
ity of  rates  with  New  York  [185]  for  east-bound  local  shipments  to 
Boston  and  that  the  existing  rates  had  not  in  that  case  been  shown  ' '  to 
be  unjust  or  unreasonable  in  themselves,  or  relatively,  and  the  petition- 
ers had  not  shown  unjust  discrimination  against  Boston  and  in  favor  of 
New  York  by  reason  of  those  rates,"  yet  two  of  the  Commissioners  ex- 
pressly recorded  their  condemnation   of  the  use  of  an  arbitrary  in 
fixing  the  Boston  rate.    The}-  said  :  ' '  An  arbitrary  of  5  cents  per  hun- 
dred is  ten  per  cent,  of  a  50  cent  rate  and  20  per  cent,  of  a  25  cent  rate. 
The  same  proof  which  might  show  this  arbitrary  was  just  when  the 
New  York  sixth  class  rate  was  50  cents  would  demonstrate  that  it  is 
unjust  now.    No  facts  have  been  shown  which  would  justify  a  doubled 
disparity  at  one  time  as  compared  with  another.     It  further  appears 
that  the  Chicago  arbitraries  of  10  cents  on  the  two  upper  classes  and  5 
cents  upon  the  remainder  are  enforced  on  business  consigned  to  Boston 
from  all  points  west  of  Buffalo  while  at  Buffalo  the  amount  of  the  ad- 


TOLEDO  PRODUCE  EXCHANGE  V.  L.  S.  &  M.  S.  RY.  CO.  151 

(lition  is  summarily  reduced  one-lialf  *  *  *  the  method  pursued 
by  the  carriers  in  ascertaining  the  amount  of  difference  is  crude  and 
unsatisfactory.    The  result  is  well  named  an  "arhitrary." 

By  the  use  of  an  arbitrary  sum  there  is  no  proper  proportion  main- 
tained, if  the  New  York  rate  changes ;  thus,  if  the  grain  rate  to  New 
York  were  fifty  cents  the  present  arbitrary  would  make  the  Boston 
rate  10  per  cent,  greater ;  and  if  the  New  York  rate  should  be  15  cents 
the  use  of  the  present  arbitrary  would  make  the  Boston  rate  33  per 
cent,  greater. 

The  following  table  shows  the  present  rates  from  Chicago  to  Boston 
and  New  York  and  the  percentage  of  increase  of  the  Boston  over  the 
Chicago  rate : 

Classes. 
12  3  4  5  6 

To  New  York 75         65         50         35         30         25 

To  Boston  85         71         55         40         35         30 

Boston  percentage  of  New  York 

rate 113       109       110       114       117       120 

an  average  per  cent,  of  113. 

[186]  In  1882  the  New  York  rate  from  Chicago  upon  the  classes  as 
near  as  they  can  be  ascertained  were  as  follows : 

Classes. 
12  3  4  5  6 

1.00         85         70         60         50         30 

In  the  use  of  an  arbitrary  differential  it  will  be  noted  that  the  per- 
centage of  increase  greatly  differed  in  1882  from  the  present  time. 

The  increments  of  rates  to  and  from  all  points  east  of  the  Mississippi 
River  and  north  of  the  Ohio  are  made  by  a  percentage  obtained  with 
reference  to  rates  to  and  from  New  York  and  other  Atlantic  or  seaboard 
cities.  The  rates  from  Chicago  to  New  York  are  taken  as  the  basis  and 
the  rates  to  and  from  other  points  indicated  are  generally  governed  by 
the  relative  mileage  of  such  points  to  the  Chicago  mileage.  This  relative 
mileage  is  sometimes  determined  upon  the  short  line  distance,  at  other 
times  upon  the  long  line  distance,  and  sometimes  upon  average  distance 
of  all  routes.  It  may  be  also  noted  that  sometimes  constructive  mileage 
is  thrown  in  as  an  element  upon  which  to  compute  the  percentage. 

It  is  ascertained  that  under  the  long  mileage  or  the  average  mileage 
of  all  routes  the  resulting  percentage  of  the  New  York  distance  would 
give  to  Boston  a  higher  rate  than  is  now  charged  by  the  addition  of  an 
arbitrary.  But  it  is  believed  that  the  general  and  proper  method  is  to 
compute  upon  the  short  line  distance,  the  case  of  departure  therefrom 


152 


ATLANTIC    PORT    DIFFERENTIALS 


being  exceptional  in  their  character  and  themselves  in  the  nature  of  an 
arbitrary. 

The  short  line  distance  from  Chicago  to  New  York  is  912 ;  from  Chi- 
cago to  Boston  1,001  miles.  The  Boston  distance  is  accordingly  109.8 
per  cent,  of  the  New  York  distance  or  say  110  per  cent. 

Applying  this  basis  alike  to  all  classes  under  the  custom  adopted  for 
other  rates  the  rates  to  Boston  on  each  class  would  be,  reckoning  Boston 
at  110,  as  follows: 

Classes. 
12  3  4 

Chicago  to  Boston 82yo     7I1/2     55         SSi/o 

Producing    reductions    as    fol- 


5 
33 


6 

271/0 


lows 


21/9       0 


0 


11/2 


21/2 


and  an  advance  on  second  class  freight  of  one-half  cent. 

In  view  of  the  fact  that  relative  distances  are  generally  considered 
in  constructing  rates  it  is  believed  that  the  arbitrary  differential  be- 
tween Boston  and  New  York  should  be  abandoned  and  that  the  differ- 
ential should  be  adjusted  upon  the  basis  of  percentage  and  that  the 
percentage  for  Boston,  assuming  New  York  rate  as  100,  should  be  110. 

Complaint  is  also  made  that  the  rates  from  western  points  to  Boston 
are  not  in  due  proportion  and  especially  that  certain  combinations  of 
rates  appear  to  be  unjust,  showing  that  the  combination  through 
Buffalo  to  Boston  is  considerably  less  than  the  combination  through 
Detroit  or  Cleveland.  A  table  here  set  forth  will  show  the  rates  from 
several  of  the  principal  western  points  to  Toledo,  Detroit,  Buffalo,  New 
York  and  Boston. 


Grain  Sates  from  Various  Western  Points  to  Toledo,  Buffalo,  New  York  and  Boston. 


d 

>i 

be 

!>.• 

.i 

From 

o~0 

R 

TO 

s 

m 

to 
0 

6th 

6th 

6th 

6th 

6th 

6th 

Class 

Class 

Class 

Class 

Class 

Class 

Rate. 

Eate. 

Rate. 

Rate. 

Rate. 

Rate. 

Cleveland,  Ohio 

8 

171/2 

221/2 

Erie,  Pa 

6 

Toledo,  Ohio   

10 

11 

191/2 

24% 

Detroit,  Mich 

10 

12 

191/2 

24  Vj 

Peoria,  111.,   

13 

13 

17 
91/2 

17 
9 

27  Va 
19 

321/2 

Columbus,  Ohio 

24 

Indianapolis,  Ind 

10 

11 

14 

13 

23 

28 

East  St.  Louis,  111 

14 

14 

18 1/9 

18 

29 

34 

Buffalo,  N.  Y 

13 

151/2 

Pittsburgh,  Pa 

15 

Chicago,  111 

09 

09 

15 

15 

25 

30 

TOLEDO  PRODUCE  EXCHANGE  V.  L.  S.  &   M.  S.  RY.  CO.        153 

[188]  From  the  rates  given  in  this  table  it  will  be  seen  tiiat  the  com- 
binations based  on  Buffalo  produce  lower  rates  from  western  points  to 
Boston  and  New  York  than  a  combination  of  the  rates  via  Detroit  and 
Toledo.    For  example  : 

Chicago  to  Toledo 9      cents 

Toledo  to  Boston 241/^  cents 

Total   331/2  cents 

Chicago  to  Buffalo 15      cents 

Buffalo  to  Boston 151/^  cents 

Total   301/2  cents 

Chicago  to  Toledo 9      cents 

Toledo  to  New  York 1 91/2  cents 

Total 28I/2  cents 

Chicago  to  Buffalo 15      cents 

Buffalo  to  New  York 13      cents 

Total   28      cents 

Although  the  combinations  through  Buffalo  are  shown  to  be  some- 
what lower  than  the  combinations  shown  through  Detroit  or  Toledo,  it 
should  be  borne  in  mind  that  the  through  rate  from  each  western  point 
in  the  territory  in  question  to  New  York  and  Boston,  whether  the 
traffic  is  routed  via  Toledo,  Detroit,  or  Buffalo,  is  in  all  cases  lower 
than  the  combined  rates  via  either  of  these  points  as  shown  above.  The 
various  combinations  may  be  made  from  the  table,  which  also  shows 
the  through  rates.  It  is  suggested  that  the  share  of  the  through  rate 
accruing  to  the  different  roads  in  the  route  need  not  be  here  considered ; 
the  complaint  involves  the  whole  rate.  Upon  this  point  attention  is 
invited  to  page  453  of  the  decision  in  the  case  of  The  Boston  Clunnber 
of  Commerce  v.  The  Lake  Shore  d;  Michigan  Southern  Ihj.  Co.,  et  al. 
{ante,  p.  126). 

"Such  adjustments  may  not  be  on  the  exact  basis  of  cost  of  service  in 
any  case,  and  many  other  considerations  may  influence  the  parties  in 
making  them.  The  fact  may  be,  therefore,  that  the  Lake  Shore  road 
and  the  New  [189]  York  Central  road  may  each  receive  more  in  amount 
of  the  through  rate  to  Boston  from  Chicago  than  to  New  York  for  the 
respective  hauls  to  Albany,  although  the  service  to  that  i)oint  is  identi- 
cal, but  the  through  rates  are  charged  for  the  entire  haul  to  the  final 
destination  and  are  not  governed  by  the  service  to  some  intermediate 
point  in  the  line  or  where  the  line  diverges  to  different  destinations." 


154  ATLANTIC    PORT    DIFFERENTIALS 

The  question  involved  appears  to  be  the  through  rate  as  affected  by 
the  arbitrary  differential  and  it  is  not  apparent  that  the  question  of 
rate  combinations  are  pertinent  or  properly  comparable  with  the 
through  rate,  except  for  limited  purposes. 

The  question  of  lighterage  at  New  York  has  been  made  quite  promi- 
nent in  the  arguments,  and  it  is  urged  that  as  lighterage  at  New  York 
to  certain  station  points  of  the  New  York  Central  is  3  cents  per  hun- 
dred pounds  and  paid  by  the  carrier,  that  the  real  rate  to  New  York 
is  25  cents  per  hundred  less  3  cents  lighterage  or  to  the  shipper  22 
cents,  and  that  the  comparison  ought  to  be  between  a  22  cent  rate  to 
New  York  and  a  30  cent  rate  to  Boston  making  the  differential  to 
Boston  8  cents  and  not  5  cents. 

This  position  is  not  believed  to  be  tenable.  The  three  defendants 
carrying  on  a  continuous  line  made  up  of  their  three  several  lines  fix 
a  through  rate  for  the  shipper.  If  lighterage  becomes  necessary  to 
complete  the  carriage  they  pay  it  out  of  the  freight  money  paid  by 
the  shipper  and  then  diyide  or  allot  what  is  left.  The  rate  to  the 
shipper  is  25  cents  and  it  seems  it  can  make  no  difference  to  him  or  to 
the  public  as  to  the  method  by  which  the  carriers  adjust  this  common 
expense  of  lighterage  in  settlements  between  themselves. 

The  conclusion,  therefore,  is  reached  by  the  Commission  that  the 
arbitrary  differentials  of  five  cents  per  hundred  on  all  classes  of  freight 
below  second  class,  of  six  cents  per  hundred  on  second  class  and  of  ten 
cents  per  hundred  on  first  class  are  excessive,  unjust,  unreasonable  and 
partake  of  the  nature  of  an  unjust  discrimination  against  Boston  and 
New  England  points  [190]  and  against  shippers  of  the  character  of 
freight  included  in  the  six  classes  from  points  east  of  Chicago  and  west 
of  Buffalo  to  Boston  and  New  England  points  and  that  the  dift'erential 
should  no  longer  be  made  by  an  arbitrary  sum  added  to  the  New  York 
rate,  but  that  said  differential  should  be  made  b}-  adding  a  percentage 
to  the  New  York  rate. 

In  the  two  cases  under  consideration  some  reference  has  been  made 
to  the  equal  charges  from  interior  points  to  New  York  and  Boston 
when  articles  are  intended  for  export,  and  also  to  the  extension  of  the 
Boston  rate  to  Portland  and  points  east  of  Portland,  and  to  the  allow- 
ance of  a  reduction  to  Boston  dealers  in  grain  and  flour  equal  to  the 
excess  of  the  domestic  over  the  export  rate  to  Boston  when  they  reship 
the  same  articles  to  Portland  and  points  east  of  Portland,  but  nothing 
has  been  determined  as  to  those  matters,  it  being  deemed  desirable  to 
consider  the  difference  in  charge  to  Boston  in  excess  of  the  charge  to 
New  York  alone  and  upon  its  own  merits,  entirelj^  disconnected  from 
any  question  which  might  arise  from  considerations  not  necessarily  in- 


TOLEDO  PRODUCE  EXCHANGE  V.  L.  S.  &  M.  S.  RY.  CO.  155 

volved  in  an  inquiry  as  to  the  Boston  difference,  styled  in  this  record 
the  Boston  differential. 

It  is  plainly  seen  that  the  effect  of  the  proposed  change  may  be  far 
reaching  and  ma}'  att'ect  places  and  rates  in  a  manner  not  now  antici- 
pated and  it  appears  that  many  other  lines  tlian  those  operated  by  the 
defendants  are  interested  in  and  may  be  seriously  affected  bj'  the  pro- 
posed change. 

In  Rend  v.  Chicago  &  Northivestern  R.  Co.,  2  Inters.  Com.  Reports, 
p.  313,  it  is  said  with  reference  to  the  proposition  that  the  law  is  satis- 
tied  when  a  rate  is  reasonable  and  fair  that :  ' '  An  exception  arises, 
when  rates  are  so  constructed  that  injustice  is  wrought  by  reason  of 
their  relation  to  other  rates  notwithstanding  that  the  rate  challenged 
may  not  of  itself  be  unreasonable,"  but  it  is  added:  "The  (luestion, 
however,  of  relative  injustice  *  *  *  must  be  viewed  upon  broader 
grounds  than  a  mere  balancing  of  one  rate  against  another.  The  entire 
field  likely  to  be  affected  by  any  proposed  change  must  be  kept  in  view 
and  if  upon  the  whole,  more  injustice  and  trouble  are  \\ke\y  to  result 
from  making  the  change  than  from  declining  to  make  it  the  Commission 
should  hesitate  to  interfere. ' ' 

The  evidence  is  to  the  effect  that  a  change  in  this  rate  will  [191] 
affect  the  rate  at  a  great  many  different  points  both  eastern  and  west- 
ern. It  would  be  unfortunate  if  in  seeking  to  bring  about  equality  the 
result  should  be  to  bring  about  injustice  and  greater  ineciuality.  To 
the  end  therefore,  that  every  interest  involved  may  be  fully  protected 
and  that  the  fullest  possible  light  may  be  brought  to  bear  upon  the 
question,  it  is  ordered  that  a  copy  of  this  report,  and  the  conclusion  of 
the  Commission  with  reference  to  the  Boston  differential  be  served  upon 
the  respondents  and  each  of  them  and  upon  the  other  roads  interested, 
namely  upon  the : 

Michigan  Central  Railroad, 

Lake  Shore  &  Michigan  Southern  Railway, 

Chicago  &  Grand  Trunk  Railway, 

Grand  Trunk  Railway, 

Chicago  &  Erie  Railroad, 

Pittsburgh,  Fort  Wayne  &  Chicago  Railway, 

Pittsburgh,  Cincinnati,  Chicago  &  St.  Louis  Railway, 

Pennsylvania  Railroad, 

Wabash  Railroad, 

New  York,  Chicago  &  St.  Louis  Railroad, 

New  York  Central  &  Hudson  River  Railroad, 

New  York,  Lake  Erie  &  Western  Railroad, 

West  Shore  Railroad, 


156  ATLANTIC    PORT   DIFFERENTIALS 

Delaware  &  Hudson  Railroad, 

Delaware,  Lackawanna  &  Western  Railroad, 

Canadian  Pacific  Railway, 

Canada  Atlantic  Railway, 

New  York,  New  Haven  &  Hartford  Railroad, 

New  York  &  New  England  Railroad, 

Rome,  Watertown  &  Ogdensburg  Railroad, 

Central  New  England  &  Western  Railroad, 

New  York,  Providence  &  Boston  Railroad, 

Fitchburg  Railroad, 

Boston  &  Albany  Railroad, 

Boston  &  Providence  Railroad, 

Central  Vermont  Railroad, 

Boston  and  Lowell  Division  Boston  &  Maine  Railroad, 

Cheshire  Railroad, 

Boston  &  Maine  Railroad, 

[192] — and  that  they  or  either  of  them,  or  any  other  carrier  subject  to 
the  law  regulating  commerce,  affected  by  the  proposed  change,  be  given 
twenty  days  from  the  service  of  this  report  to  show  cause  by  answer 
why  an  order  should  not  be  made  commanding  them,  and  each  of  them, 
and  all  carriers  engaged  in  interstate  commerce  subject  to  the  law 
regulating  commerce,  to  desist  from  charging,  on  all  classified  freight 
carried  by  them  from  Chicago  and  intermediate  points  between  Chi- 
cago and  Buffalo  to  Boston,  an  arbitrary  differential  above  the  New 
York  rate  of  10  cents  per  hundred  pounds  on  first  class  freight,  six 
cents  per  hundred  pounds  on  second  class  freight,  and  five  cents  per 
hundred  pounds  on  the  third,  fourth,  fifth  and  sixth  class  freight,  and 
that  hereafter  the  Boston  rate  from  Chicago  and  points  west  of  Buffalo 
to  Boston  and  New  England  points  shall  be  made  by  adding  to  the  New 
York  rate  (as  differential)  an  increase  of  10  per  cent.,  and  that  if 
within  the  time  named  in  this  order  no  such  answers  are  filed,  then  an 
order  shall  issue  fixing  the  Boston  differential  at  10  per  cent,  increase 
over  the  New  York  rate  as  herein  outlined  and  indicated. 


NEW  YORK  PRODUCE  EXCHANGE 

V. 

THE  BALTIMORE  &  OHIO  RAILROAD  COMPANY,  ET  AL. 

7  L  C.  C.  612. 


157 


NEW  YORK  PRODUCE   EXCHANGE 
V. 

baltimore  &  ohio  railroad  company,  et  al. 

Decided  April  30,  1898. 

(7  I.  C.  C.  612.) 

Eailway  companies  may  make  whatever  rates,  from  whatever  lines,  and  estab- 
lish whatever  differentials  they  deem  best  for  the  purpose  of  securing  and  con- 
ducting transportation,  provided  the  just  interests  of  the  public  are  not  sacri- 
ficed thereby,  and  whether  in  so  doing  they  act  wisely  or  unwisely,  fairly  or 
unfairly  between  themselves,  is  not  for  the  Commission  to  determine;  the 
jurisdiction  of  the  Commission  is  confined  to  inquiring  whether  the  situation 
which  the  carriers  have  created  is  in  violation  of  the  Act  to  Regulate  Com- 
merce. 

Railway  com])anies  are  not  prohibited  by  section  three  of  tlio  Act  from  pre- 
ferring one  locality  over  another  unless  the  preference  is  undue  or  unreasona- 
ble, but  a  preference  which  is  without  legitimate  excuse  is,  in  and  of  itself, 
undue  and  unreasonable. 

Under  decisions  of  the  United  States  Supreme  Court, — Import  Rate  Case,  In- 
terstate Commerce  Commission  v.  Texas  ^  P.  B.  Co.,  162  U.  S.  197,  40  L.  ed. 
940,  5  Inters.  Com.  Rep.  405,  and  the  Troy  Case,  Interstate  Commerce  Com- 
mission V.  Alabama  Midland  E.  Co.,  168  U.  S.  144,  42  L.  ed.  414, — railway  com- 
petition may,  but  it  does  not  necessarily,  justify  a  preference  to  a  particular 
locality  or  commodity;  and  therefore,  granting  that  discrimination  against  a 
locality  which  is  based  on  such  competition  is  excusable  in  theory,  the  question 
still  remains  whether  under  the  third  section  it  is  undue  or  unreasonable;  and 
that  question  is  one  of  fact  in  each  case. 

Carriers  frequently  disregard  distance  in  making  their  rates,  and  they  may 
lawfully  do  so  under  some  circumstances;  but  distance  should  be  regarded 
whenever  possible,  and  no  previous  decision  is  authority  for  a  ruling  that  a 
carrier  may  be  compelled  to  disregard  it  for  the  purpose  of  }>lacing  two  com- 
munities upon  a  commercial  equality. 

Upon  complaint  brought  on  behalf  of  New  York  City,  and  alleging  that  differ- 
entials, allowed  by  the  defendant  carriers  on  grain,  flour  and  provisions  from 
Chicago  and  other  western  points,  of  2  cents  to  Philadelphia  and  3  cents  to 
Baltimore  below  the  rates  to  New  York,  are  unlawful  under  Section  3  of  the 
Act  to  Regulate  Commerce, — Held,  That  the  differentials  are  legitimately  based 
upon  the  comjietitive  relations  of  the  carriers,  that  it  does  not  appear  upon  the 
present  record  that  the  carriers  have  exceeded  the  limit  within  whicii  they  are 
free  to  determine  for  themselves,  and,  accordingly,  that  the  differentials  com- 
plained of  do  not  result  in  unlawful  preference  or  advantage  to  Philadelphia 
or  Baltimore  over  the  City  of  New  York. 

[614]   John  D.  Kernan  and  Baldwin  tf;  Blackmar,  for  complainant. 

Hugh  L.  Bond,  Jr.,  for  Balto.  &  Ohio  System  and  Receivers. 

James  A.  Logan,  George  V.  Massey,  John  G.  Johnson  and  Evarts, 

Choate  cf:  Beaman,  for  Penna.  System. 
H.  T.  Wickham,  for  C.  &  0.  Ry.  Co. 
R.  W.  de  Forest,  for  Central  R.  R.  Co.,  of  N.  J. 
Samuel  Hoar,  for  Boston  &  Albany  R.  R.  Co. 
S.  E.  Williamson,  for  N.  Y.  C.  &  St.  L.  Ry.  Co. 

159 


160  ATLANTIC    PORT   DIFFERENTIALS 

Frank  Loomis,  for  N.  Y.  C.  &  H.  R.  R.  R.  Co. 

Ashhel  Green,  for  West  Shore  R.  R.  Co. 

Francis  I.  Go  wen  and  F.  H.  Janvier,  for  Lehigh  Valley  R.  R.  Co. 

George  C.  Greene,  for  L.  S.  «&  M.  S.  Ry.  Co. 

John  B.  Kerr,  for  N.  Y.  0.  &  W.  R.  R.  Co. 

Henry  Russell  and  AsJiley  Fond,  for  Mich.  Cent.  R.  R.  Co. 

J.  D.  Campbell,  for  Phila.  &  Reading  R.  R.  Co.  and  Receivers. 

G.  M.  Cumminc),  for  Erie  Sj^stem. 

E.  W.  mrong,  for  B.  &  0.  S.  W.  Ry.  Co. 

T.  J.  O'Brien,  for  Grand  Rapids  &  Indiana  R.  R.  Co. 

Silas  AV.  Fcttit,  for  Trades  League,  Board  of  Trade  and  Commercial 

Exchange  of  Philadelphia. 
Sherman  Hoar,  for  Boston  Chamber  of  Commerce. 
William,  A.  Fisher,  for  Baltimore  Chamber  of  Commerce. 

REPORT   AND  OPINION   OF   THE   COMMISSION. 

Prouty,  Commissioner: 

The  New  York  Produce  Exchange,  the  complainant  in  this  matter, 
is  a  corporation  under  the  laws  of  New  York,  composed  of  merchants 
residing  in  the  city  of  New  York  and  interested  largely  in  the  handling 
of  grain  and  other  produce  at  that  point.  No  question  is  made  as  to 
its  competency  to  commence  and  maintain  this  proceeding. 

The  defendants  are  various  railroad  companies  engaged  in  the  inter- 
state transportation  of  freight,  including  grain  and  other  produce,  to 
New  York  and  various  other  points  upon  the  Atlantic  seaboard.  They 
admit  that,  with  respect  to  such  transportation,  they  are  subject  to  the 
Act  to  Regulate  Commerce. 

[615]  The  complainant  attacks  by  its  complaint  certain  differentials 
in  freight  rates  upon  the  ground  that  they  unduly  prefer  Boston, 
Philadelphia,  Baltimore,  Newport  News  and  Norfolk  as  localities  to  the 
locality  of  New  York.  The  Boston  Chamber  of  Commerce,  the  Balti- 
more Chamber  of  Commerce  and  certain  trade  organizations  in  Phila- 
delphia have  intervened  upon  the  ground  that  the  commercial  interests 
which  they  represent  are  or  may  be  affected  by  the  proceeding.  Nor- 
folk and  Newport  News  have  not  been  represented  at  any  of  the  hear- 
ings. 

Upon  the  trial  the  issue  apparently  narrowed  itself  to  one  between 
New  York,  Philadelphia  and  Baltimore.  The  Boston  Chamber  of  Com- 
merce appeared  upon  the  first  hearing  in  New  York,  but  did  not  ap- 
pear at  any  subsequent  hearing,  nor  did  it  ask  to  be  heard  upon  final 
argument.  This  seems  to  have  been  upon  the  assumption  that  the  com- 
plainant made  no  question  as  between  itself  and  Boston.     That  is.  New 


NEW  YORK  PRODUCE  EXCHANGE  V.  B.  &  O.   R.  R.,  ET  AL.  161 

York  does  not  ask  to  bo  allowed  a  differential  upon  export  traffic  as 
against  Boston.  Neitlier  do  we  understand  that  it  has  been  suggested 
in  this  case  that  a  different  differential  should  be  applied  to  Norfolk 
and  Newport  News  than  is  applied  to  Baltimore.  The  controversy  is 
reall}^  between  the  three  cities,  New  York,  Philadelphia  and  Baltimore. 
Whenever  facts  with  reference  to  Boston,  Newport  News  and  Norfolk 
are  stated,  thc}^  are  only  given  to  make  the  statement  complete  as  bear- 
ing upon  the  controversy  between  these  three  localities. 

It  incidentally  appears  that  Boston  has  two  rates, — an  export  and 
a  domestic  rate.  The  legality  oi;  proprietor  of  these  different  rates  was 
not  referred  to  in  the  discussion  of  the  case,  and  is  not  considered  in 
its  disposition.  The  dift'erentials  in  question  are  those  upon  east-bound 
freight  traffic  to  the  above-named  cities.  There  is  no  dispute  as  to  the 
rates.  Taking  the  rate  to  New  York  as  a  basis,  the  rate  to  Philadel- 
phia is  2  cents  per  hundred  pounds  lower,  all  classes;  and  to  Baltimore 
■i  cents  per  hundred  pounds  lower,  all  classes.  Norfolk  and  Newport 
News  take  the  Baltimore  rate,  and  upon  export  traffic,  Boston  takes  the 
New  York  rate. 

The  rate  itself  frequently  varies,  but  the  differentials  are  at  all  times 
and  upon  all  classes  the  same.  The  rates  complained  of  in  this  pro- 
ceeding are  those  upon  grain,  flour  and  provisions,  and  [616]  these 
rates  from  Chicago  at  the  time  of  the  filing  of  the  complaint  were  as 
follows : 

To  Grain.  Flour.  Provisions. 

New  York   20  cts.  20  cts.  30  cts. 

Boston   (for  export)    20  cts.  20  cts.  30  cts. 

Philadelphia    18  cts.  18  cts.  28  cts. 

Baltimore     17  cts.  17  cts.  27  cts. 

Newport  News   17  cts.  17  cts.  27*  cts. 

Norfolk    17  cts.  17  cts.  27  cts. 

For  the  purpose  of  making  the  rates  from  various  points  in  the  mid- 
dle west  to  the  Atlantic  seaboard,  the  Chicago-New  York  rate  is  taken 
as  a  basis,  the  rate  from  the  other  points  being  a  per  cent,  of  this  rate. 
Thus  the  rate  from  Detroit,  J\Iich.,  is  78  per  cent.,  from  Indianapolis, 
Ind.,  93  per  cent.,  from  East  St.  Louis,  111.,  116  per  cent,  and  from 
Rock  Island,  111.,  122  per  cent.  The  rate  from  any  one  of  these  points 
to  Philadelphia,  Baltimore,  Norfolk  or  Newport  News  is  made  by  sub- 
tracting from  the  New  York  rate  the  fixed  differential  above  given. 

The  territory  within  which  rates  are  computed  upon  the  basis  of  the 
New  York-Chicago  rate  is  that  bounded,  roughly  speaking,  by  the 
Mississippi  River  upon  the  west,  the  Ohio  River  upon  the  south,  a  lim' 
drawn  about  due  north  from  Pittsburgh  upon  the  east,  and  the  Great 
Lakes  upon  the  north,  excluding  most  of  the  State  of  AViseousin.  Not 
only  do  the  differentials  affect  all  traffic  which  originates  in  this  terri- 
11 


162  ATLANTIC    PORT   DIFFERENTIALS 

tory,  but  also  all  traffic  which  passes  through  this  territory  upon  its 
way  to  the  Atlantic  seaboard. 

The  complaint  also  attacks  what  are  knoM^n  as  the  ex-lake  differ- 
entials. Large  quantities  of  freight,  especially  grain  and  flour,  are 
brought  through  the  Great  Lakes  to  various  points  upon  the  southern 
shores  of  Lake  Erie  and  Lake  Ontario,  from  whence  they  are  trans- 
ported by  rail  to  the  Atlantic  seaboard.  Upon  this  a  differential  is  ap- 
plied of  1  cent  per  hundred  pounds  in  favor  of  Philadelphia  and  Balti- 
more as  against  New  York.  This  differential  does  not  seem  to  apply 
to  provisions.  At  the  time  of  the  filing  of  this  complaint  the  rates 
from  lake  ports  to  Boston,  New  [617]  York,  Philadelphia  and  Balti- 
more respectively  per  hundred  pounds  were  as  follows : 

To  Grain.  Flour.  Provisions. 

New  York   11  cts.  11  cts.                  16  cts. 

Boston  (for  export)    11  cts.  11  cts.                  16  cts. 

Philadelphia    10  cts.  10  cts.                  16  cts. 

Baltimore    10  cts.  10  cts.                  16  cts. 

Special  commodity  rates  by  the  bushel  Avere  also  in  effect  from  these 
lake  ports  to  the  above  named  cities.  They  were  in  lots  of  8,000  bushels 
and  over,  to  one  consignee  and  one  destination,  as  follows : 

Wheat.                  Corn.  Barley.  Oats. 

New  York   5  cts.  i%  cts.  4%   cts.  3V2  cts. 

Boston   (for  export)    .      5  cts,  4%   cts.  iV^  cts.  3%   cts. 

Philadelphia    4  cts.  3%  cts.  33-4   cts.  3       cts. 

Baltimore     4  cts.  3%  cts.  3%  cts.  3       cts. 

It  will  be  seen  from  the  above  tables  that  the  regular  differential 
upon  grain  when  shipped  in  carload  lots  by  the  hundred  pounds  is  1 
cent  in  favor  of  Baltimore  and  Philadelphia ;  when  shipped  under  the 
special  commodity  tariff  by  the  bushel  it  is  considerably  more,  being  i 
cent  per  bushel  in  the  case  of  wheat  and  corn  and  ^2  cent  per  bushel 
in  the  case  of  barley  and  oats.  Grain  for  export  would,  of  course,  al- 
ways be  shipped  under  the  commodity  tariff. 

Some  knowledge  of  the  history  of  these  differentials  is  necessary^  to 
an  understanding  of  the  situation.  The  earliest  agreed  differential  of 
which  the  testimony  gives  any  account  was  that  of  1869,  by  which  Bal- 
timore enjoyed  an  advantage  of  10  cents  per  hundred  pounds  over  Nevv' 
York,  It  does  not  appear  what  the  differential  in  favor  of  I'hiladelphia 
was.  In  1870  a  war  of  rates  occurred,  with  the  result  that  the  Balti- 
more differential  was  reduced  to  5  cents  per  hundred  pounds  on  grain 
and  the  lower  classes  of  freight,  while  upon  the  higher  classes  of  freight 
the  differential  was  10  cents  per  hundred  pounds,  and  these  differen- 
tials seem  to  have  continued  until  about  1876.  It  does  not  appear 
what  the  differential  of  Philadelphia  upon  east-bound  traffic  was,  but 


Second 

Third 

Fourth 

Special 

Class. 

Class. 

Class. 

Class. 

9  cts. 

8  cts. 

6  cts. 

5  cts. 

7  cts. 

6  cts. 

4  cts. 

3  cts. 

NEW  YORK  PRODUCE  EXCHANGE  V.  B.  &  O.  R.  R.,  ET  AL.  163 

a  tariff  of  November,  1875,  gives  tlie  differentials  upon  west-bound 
traffic  as  follows : 

First 

Class. 

Baltimore 10  cts. 

Philadelphia    7  cts. 

[618]  In  March,  1876,  this  system  of  an  arbitrary  differential  was 
abandoned  and  the  lines  agreed  upon  a  system  of  percentage  differ- 
entials based  upon  the  relative  distances  from  Western  cities  to  Balti- 
more, Philadelphia,  and  New  York,  respectively,  taking  New  York  as 
the  basis.  Under  this  agreement  the  rate  from  Chicago  to  Baltimore 
was  13  per  cent,  and  to  Philadelphia  10  per  cent,  less  than  to  New- 
York,  and  from  Cincinnati  to  Baltimore  24  per  cent.,  and  to  Philadel- 
phia 12  per  cent,  less  than  to  New  York. 

After  a  few  wrecks 'experience,  the  New  York  Central  and  the  Erie 
withdrew  from  this  agreement  upon  the  assertion  that  it  was  too  favor- 
able to  Baltimore  and  Philadelphia.  Thereupon  another  rate  war  en- 
sued, w^hich  terminated  in  an  agreement  of  April  5,  1877,  by  which 
fixed  differences  in  rate  were  re-established  in  place  of  differences  based 
upon  relative  distances.  Under  this  agreement  east-bound  differentials 
from  western  points  were  3  cents  to  Baltimore  and  2  cents  to  Philadel- 
phia upon  all  classes.  On  west-bound  traffic  the  differentials  in  favor 
of  Baltimore  and  Philadelphia  differed  with  different  classes,  and  were 
as  follows : 

First 

From  Class. 

Baltimore     8  cts. 

From 
Philadelphia    6  cts.  6  cts.  2  cts.  2  cts. 

It  would  seem  that  the  contentions  between  the  carriers  which  had 
given  rise  to  these  differentials  were  mostly  over  export  traffic,  and 
that  the  differentials  were  insisted  upon  and  were  allowed  for  the  pur- 
pose of  permitting  the  various  carriers  to  enjoy  a  portion  of  that  traffic. 
The  agreement  of  April  5,  1877,  seems  to  have  been  made  upon  the  idea 
of  equalizing  the  cost  of  carriage  from  various  interior  shipping  points 
to  foreign  ports.  It  recognized  the  fact  that  ocean  freight  rates  from 
Baltimore  and  Philadelphia  to  such  foreign  ports  were  higher  than 
from  New  York  and  that  inland  freights  must  be  correspondingly  lower 
so  that  the  total  freight  might  be  the  same. 

The  agreement  provided  that,  upon  the  giving  of  certain  notice,  any 
party  to  it  might  withdraw,  and  in  June,  1880,  the  New  York  Central 
gave  notice  of  withdrawal,  stating  that  the  differentials  were  originally 
based  upon  supposed  differences  in  ocean  rates,  that  such  differences  no 
longer  existed,  that  there-  [619]  fore  the  reasons  for  the  differentials 


Second 

Third 

Fourth 

Class. 

Class. 

Class. 

8  cts. 

3  cts. 

3  cts. 

164  ATLANTIC    PORT   DIFFERENTIxVLS 

had  ceased  to  exist  and  that  the  differentials  themselves  should  also 
cease.  The  Pennsylvania  and  the  Baltimore  and  Ohio  insisted  upon 
the  differentials,  and  the  action  of  the  New  York  Central  apparently 
led  to  another  rate  war,  which  terminated  in  the  latter  part  of  1881  by 
a  restoration  of  the  differentials  of  April  5,  1877. 

It  Avould  seem  that  the  various  Atlantic  seaports  which  were  served 
by  these  different  railway  lines  had  taken  more  or  less  interest  in  this 
subject  of  differentials.  New  York  insisted  that  the  differentials  should 
be  abolished;  Philadelphia  that  there  should  be  no  difference  between 
that  city  and  Baltimore;  and  Baltimore  that  the  differential  of  3  cents 
allowed  in  its  favor  was  too  low ;  and  each  city  strenuously  contended 
that  it  was  the  duty  of  the  railway  lines  serving  that  particular  lo- 
cality to  insist  upon  and  obtain  an  adjustment  of  these  differentials  in 
accordance  with  its  views. 

Apparently  for  the  purpose  of  considering  the  claims  of  these  differ- 
ent communities  and  perhaps  placating  the  public  rather  than  of  set- 
tling the  question  for  the  carriers,  the  New  York  Central,  the  Erie,  the 
Pennsylvania  and  the  Baltimore  &  Ohio  joined  in  requesting  Allen  6. 
Thurman,  Elihu  B.  Washburne  and  Thomas  M.  Cooley  to  act  as  an 
advisory  commission  for  the  purpose  of  investigating  and  reporting 
upon  the  general  matter  of  these  differentials.  These  gentlemen  ac- 
cepted the  invitation  and  entered  upon  their  work  in  February,  1882. 

In  their  investigation  the  railroad  companies  themselves  declined  to 
participate  further  than  by  furnishing  to  the  commissioners  whatever 
information  might  be  asked  for.  This  commission  lield  sittings  in  New 
York,  Philadelphia  and  Baltimore  in  the  east,  and  in  certain  cities  in 
the  west,  heard  statements  and  arguments  from  the  representatives  of 
these  various  localities,  collecting  whatever  information  it  could  bear- 
ing upon  the  subject,  and  finally  in  July,  1882,  made  a  report.  This 
report  seems  to  have  been  very  carefully  considered  by  the  commis- 
sioners, and,  while  it  deals  largely  in  theory  and  generalities,  it  appears 
to  be,  as  was  to  have  been  expected  from  the  character  of  the  gentlemen 
who  signed  it,  an  able  and  comprehensive  review  of  the  situation. 

The  conclusion  at  which  they  arrived  was  that  distance  could  not  be 
used  as  a  measure  of  these  differentials;  neither  could  [620]  cost  of 
service.  Competition,  which  embraced  these  two,  and  all  other  factors, 
if  properly  conducted  through  a  series  of  years,  was  the  most  reliable 
guide.  Competition,  after  many  years,  had  resulted  in  fixing  the  dif- 
ferentials in  force.  Those  differentials  were  justified  to  a  certain  ex- 
tent by  distance  and  to  a  certain  extent  by  cost  of  service.  The  pur- 
pose of  the  differential  was  to  eciualize  the  cost  of  exporting  grain  and 
other  merchandise  through  the  various  ports  to  which  they  were  ap- 


NEW  YORK  PRODUCE  EXCHANGE  V.  B.  &  0.  K.  R.,  ET  AL.  165 

plied.  A  difference  in  ocean  freight  rates  from  those  respective  ports, 
corresponding  generally  to  the  inland  differentials,  was  found  to  exist. 
Upon  the  whole,  therefore,  the  commission  declined  to  recommend  that 
the  differentials  which  had  been  agreed  upon  should  be  disturbed. 

It  will  be  seen,  therefore,  that  in  1882  the  fairness  and  reasonableness 
of  the  present  differentials  were  approved  by  that  board,  and  those  dif- 
ferentials have  ever  since  been  in  effect. 

Manifestly,  however,  the  conditions  which  determine  the  fairness  of 
a  differential  are  continually  varying.  That  fact  is  clearly  stated  in 
the  above  report,  in  which  it  is  said  that  if  in  the  future  the  operation 
of  these  differentials  should  become  burdensome  to  any  one  of  the  lo- 
calities interested,  they  should  be  readjusted  or  abolished.  The  com- 
plainant insists  that  since  1882  conditions  have  so  changed  that,  as- 
suming them  to  have  been  just  then,  they  are  unjust  to-day.  The  com- 
plainant's case  attacks,  first  the  general  fairness  of  the  differential,  and 
seeks  to  show,  second,  that  the  arguments  which  justified  the  dift'eren- 
tials  in  1882  do  not  justify  them  to-day. 

The  complainant  asserts  at  the  outset  that  this  difference  in  rate  can- 
not be  justified  upon  the  score  of  a  corresponding  difference  in  distance. 
It  so  happens  that  the  shortest  distance  from  Chicago  to  New  York, 
Philadelphia  and  Baltimore  is  in  every  instance  by  the  Pennsylvania 
lines,  being : 

To 

New  York  912  miles. 

Philadelphia,    822     " 

Baltimore    802     " 

Merchandise  is  transported  from  Chicago  to  all  three  of  these  cities 
by  man}^  other  lines,  and  the  distances  by  these  lines  vary  greatl}'.  It 
is  not  deemed  essential,  however,  to  state  these  various  distances,  in  the 
view  we  have  taken  of  the  application  of  distance  to  the  disposition  of 
this  case. 

[621]  One  thing  should,  however,  be  noted  in  this  connection.  The 
distances  above  given  are  from  Chicago,  but  by  no  means  all  of  the 
traffic  involved  moves  from  Chicago,  and  if  distance  were  to  be  re- 
garded as  a  controlling  factor  and  these  differentials  were  to  be  ad- 
justed upon  the  basis  of  distance,  it  would  be  necessary  to  know  the 
relative  distances  from  the  point  of  origin  of  the  traffic.  Thus,  spring 
wheat  is  raised  mainly  in  the  States  of  Wisconsin,  Minnesota  and  the 
two  Dakotas.  Now,  the  complainants  say  that  this  section  is  naturally 
tributary  to  New  York,  and  that  the  spring  wheat  crop  is  properly 
exported  through  that  port.  The  corn  belt  lies  farther  south,  and  em- 
braces Indiana,  Illinois,  Missouri,  Kansas,  Nebraska  and  Towa.  This 
territory,  the  advocates  of  Baltimore  insist,  is  naturally  tributary  to 


166  ATLANTIC    PORT   DIFFERENTIALS 

that  city,  so  that  the  greater  amount  of  corn  exports  ought  properly  to 
go  out  through  that  port,  and  the  testimony  upon  the  part  of  Balti- 
more tends  to  show  that  it  is  the  effort  of  her  merchants  to  intercept 
this  corn  before  it  ever  reaches  Chicago  and  bring  it  to  Baltimore,  and 
that  this  effort  is  very  largely  successful. 

For  the  purpose  of  showing  the  point  of  origin  of  this  traffic  as  bear- 
ing upon  the  question  of  these  differentials,  a  statement  prepared  under 
the  direction  of  Mr.  George  R.  Blanchard,  commissioner  of  the  Joint 
Traffic  Association,  was  introduced  by  the  complainants.  This  state- 
ment shows  the  origin  of  east-bound  dead  freight  which  originates  at 
and  west  of  the  trunk  line  termini,  including  both  all-rail  and  lake  and 
rail  traffic,  and  which  is  carried  to  the  eastern  termini  of  those  lines. 
It  is  not  deemed  material  to  encumber  this  finding  of  facts  with  that 
statement.  It  embraces  all  the  dead  freight,  and  not  merely  that  which 
is  involved  in  this  proceeding.  This  fact  may,  however,  be  noted,  that 
the  origin  of  dead  freight  is  not  fixed  in  its  proportions,  but  continually 
varies  from  year  to  year. 

This  table  extends  from  1888  to  1896  inclusive.  From  it,  it  appears 
that  in  1888,  15.6  per  cent,  of  such  freight  originated  at  Chicago,  while 
in  1896  onlj^  10  per  cent,  originated  there.  In  1888,  2.7  per  cent,  was 
classified  as  "unknown  and  local,"  while  in  1896  this  class  embraced 
14.3  per  cent.,  much  more  than  any  other  one  class.  It  has  already 
been  noted  that  in  this  table  the  traffic  in  question  is  so  intermingled 
with  other  traffic  that  no  definite  information  is  furnished  as  to  it. 

[622]  The  complainant  further  insists  that  these  differentials  cannot 
be  justified  upon  the  basis  of  cost  of  service.  No  direct  testimony  was 
introduced  upon  this  branch  of  the  case.  The  complainant  showed 
from  the  reports  of  the  Penns^dvania  Railroad  Company-  that  the  cost 
of  movement  of  all  freight  upon  its  lines  in  the  year  1880  was  4.74  mills 
per  ton  per  mile,  and  in  1895,  4  mills  per  ton  per  mile.  Treating  this 
as  the  cost  of  moving  the  commodities  in  question  it  would  have  cost 
in  1880,  2.13  cents  per  hundred  pounds  less  from  Chicago  to  Philadel- 
phia than  to  New  York,  and  1.80  cents  less  per  hundred  pounds  in 
1895 ;  in  1880,  2.60  cents  per  hundred  pounds  less  to  Baltimore  than 
to  New  York,  and  in  1895,  2.20  cents  less  per  hundred  pounds.  Upon 
this  basis,  therefore,  the  following  differentials  should  have  been  al- 
lowed : 

1880  1895 

Philadelphia    2 .  13  cts.  1 . 8  cts. 

Baltimore    2.6     "  2.2" 

No  computation  of  this  sort  can  be  of  anj^  value  without  knowing 
whether  the  basis  of  the  computation  is  correct,  or,  in  other  words, 
whether  the  cost  of  moving  the  grain  is  as  assumed. 


NEW  YORK  PRODUCE  EXCHANGE  V.  B.  &  O.  R.  R.,  ET  AL.  167 

lu  this  connection  one  subject  which  was  much  discussed  in  the  testi- 
mony may  be  referred  to,  since,  if  it  has  any  force  whatever,  it  is  as 
bearing  upon  the  additional  cost  of  service.  This  subject  is  that  of 
lighterage  and  terminal  charges  at  the  port  of  New  York. 

Export  grain  upon  arriving  at  any  of  these  seaports,  is  either  placed 
in  an  elevator  for  storage  or  transferred  directly  to  the  vessel.  At  all 
the  ports  except  New  York  the  mode  of  proceeding  seems  to  be  to  trans- 
fer the  grain  directly  from  the  car  to  the  elevator  upon  its  arrival,  and 
from  the  elevator  to  the  vessel,  when  it  is  desired,  the  vessel  being 
brought  alongside  the  elevator  for  the  purpose  of  receiving  the  grain. 

In  New  York,  upon  the  other  hand,  the  grain  is  put  in  barg(.'s  and 
towed  to  the  side  of  the  vessel,  where  it  is  transferred  by  a  floating 
elevator  from  the  barge  to  the  vessel.  It  seems  sometimes  to  be  trans- 
ferred directly  from  the  car  to  the  barge,  but  in  the  great  majority  of 
cases  it  is  taken  into  the  elevator  in  the  first  instance  and  from  the  ele- 
vator spouted  into  a  barge  in  exactly  the  same  way  that  it  would  be 
into  the  hold  of  the  vessel.  [623]  The  railroad  company  is  at  the  ex- 
pense of  towing  the  barge  to  the  side  of  the  vessel,  where  the  owner  of 
the  grain  receives  it  and  transfers  it  at  his  expense  into  the  vessel. 
There  was  considerable  testimony  as  to  the  cost  to  the  railroad  com- 
pany of  lightering  grain ;  that  is,  towing  the  barge  from  the  dock  to 
the  side  of  the  vessel  and  giving  it  the  four  days'  storage  to  which  it 
was  entitled,  and  this  testimony  is  not  altogether  harmonious. 

We  find  that  the  expense  of  this  service  is  about  y^  cent  a  bushel. 
It  costs  about  the  same  to  transfer  the  grain  directly  from  the  ears  to 
the  barge  as  it  does  to  transfer  it  into  the  elevator  and  thence  discharge 
it  into  the  barges.     What  this  cost  is  did  not  appear. 

By  the  agreement  of  April  5,  1877,  it  was  provided  that  the  tei'ininal 
charges  for  the  storing  and  loading  of  grain  should  be  the  same  at  ail 
the  ports,  and  this  charge  was  then  fixed  at  V-/^  cents  per  bushel,  which 
has  been  the  charge  ever  since.  As  a  rule  the  railroad  companies  own 
the  elevators  in  Boston,  Philadelphia,  Baltimore  and  probably  at  Nor- 
folk and  Newport  News.  When,  therefore,  the  carrier  transports  grain 
from  Chicago  to  Baltimore  and  puts  it  aboard  a  vessel  there,  it  receives 
for  that  entire  service  the  regular  freight  rate,  and  in  addition  the 
terminal  charge  of  \y^  cents.  At  New  York  the  carrier  takes  the  grain 
into  its  elevator,  discharges  it  into  barges  and  then  tows  those  barges 
to  the  side  of  the  vessel,  receiving  therefor  merely  the  freight  rate. 
The  11/4  cents  per  bushel  paid  for  elevating  at  New  York  is  received 
by  the  floating  elevator  compan3^  It  follows,  therefore,  that  the  car- 
rier at  New  York  renders  for  nothing  the  same  service  for  whicli  it  is 


168  ATLANTIC    PORT    DIFFERENTIALS 

paid  114  cents  at  all  the  other  ports,  and  in  addition  incurs  lighterage 
expenses  of  i/^  cent  per  bushel. 

The  interveners  strenuously  insisted  that  this  additional  burden 
under  which  the  carriers  rested  at  New  York  in  the  handling  of  grain 
for  export  justified  the  imposition  of  the  differential. 

It  is  indicated  above  that  grain  is  only  lightered  at  the  port  of  New 
York.  This  is  not  quite  the  fact.  Considerable  quantities  are  light- 
ered at  Philadelphia,  just  how  much  did  not  appear,  and  some  at  Bos- 
ton. In  these  cases,  as  at  New  York,  the  expense  of  the  lighterage  is 
borne  by  the  carrier. 

The  agreement  of  April  5,  1877,  by  which  these  differentials  were 
originally  fixed,  recognized  as  their  justification  the  fact  that  [624] 
the  ocean  freights  to  European  inarkets  were  less  from  New  York  than 
from  Baltimore  and  Philadelphia,  and  that  the  inland  rates  to  New 
York  ought  to  be  correspondingly  higher  in  order  to  equalize  the 
through  rate.  The  Advisory  Commission  of  1882  found  this  same  con- 
dition of  things  and  made  that,  in  some  measure  at  least,  a  reason  for 
recommending  that  the  differentials  be  not  disturbed.  The  complain- 
ant says  that  whatever  the  condition  maj"  have  been  in  1877,  or  what- 
ever it  may  have  been  in  1882,  at  the  present  time  ocean  freights  upon 
grain,  flour  and  provisions  are  substantially  the  same  from  all  the  ports. 

The  testimon}^  in  this  case  shows  that  grain  is  exported  in  two  \\ays : 
first,  by  full  cargo ;  second,  by  berth  rates.  The  ocean  carriage  is  said 
to  be  by  full  cargo  when  the  ship  is  loaded  entirely'  with  one  kind  of 
merchandise  and  carries  no  other  freight.  It  did  not  appear  that  flour 
or  provisions  were  ever  exported  in  full  cargo  lots,  although  that  mas' 
be  rarelj'  done.  Grain,  especially  corn,  is  frequently  exported  in  that 
way.  Sometimes  the  ship  taking  the  full  cargo  of  grain  comes  from  a 
foreign  port  to  this  country  in  ballast  entirely  for  that  purpose.  Of- 
tener  it  arrives  here  loaded  or  partly  loaded  with  some  kind  of  mer- 
chandise and  seeks  a  return  load.  The  testimony  was  that  vessels  for 
full  cargo  business  could  be  chartered  at  practically  the  same  price  to 
load  at  either  New  York,  Baltimore,  Philadelphia,  Norfolk  or  Newport 
News.  If  the  vessel  comes  to  the  Atlantic  coast  for  the  purpose  of 
obtaining  and  carrying  away  a  cargo  of  corn,  it  is  difficult  to  see  any 
reason  wh}'  it  would  not  transport  that  corn  at  the  same  price  per 
bushel  from  either  of  these  ports.  Nor  did  the  defendants  or  the  in- 
terveners seriously  contend  that  this  was  not  ordinarily  the  case  in  full 
cargo  business.  It  was  alleged,  however,  upon  the  part  of  the  inter- 
venors  that  there  were  certain  advantages  at  New  York  in  doing  a  full 
cargo  business,  and  upon  the  part  of  the  complainants  that  there  were 
certain  advantages  at  the  other  ports  in  this  class  of  business. 


NEW  YORK  PRODUCE  EXCHANGE  V.  B.  &  O.   K.  R.,  KT  A1-.  109 

The  great  bulk  of  imports  land  at  New  York.  If  a  ship  is  at  New 
York,  having  come  there  with  a  load  of  merchandise,  it  naturally  pre- 
fers to  take  its  return  cargo  at  that  point  rather  than-  be  to  the  expense 
of  proceeding  to  some  other  port.  The  testimony  showed  that  it  would 
proceed  to  any  of  the  other  ports  from  New  York,  or  from  any  outport 
to  any  other  Atlantic  out-  [625]  port  for  about  %  of  one  cent  per  bushel 
in  the  freight  rate.  Since  more  vessels  seeking  return  cargoes  are  con- 
signed to  New  York  than  to  the  other  ports  this  would  perhaps  consti- 
tute a  slight  advantage  in  favor  of  that  port. 

Upon  the  other  hand.  It  appears  that  what  are  called  the  i)<)rt  charges 
are  higher  at  New  York  than  at  either  Baltimore  or  Pliiladclpliia.  Just 
what  these  port  charges  consist  of  and  just  liow  great  a  burden  they 
are  did  not  appear,  but  it  costs  a  vessel  more  by  some  tiegrce  to  enter 
and  load  at  the  port  of  New  York  than  it  does  at  its  sister  poi'ts,  and  to 
that  extent  New  York  rests  under  a  disadvantage  in  tins  full  cargo 
business. 

So,  also,  it  was  claimed  that  vessels  loading  at  Baltimore,  Norfolk 
and  Newport  News  had  during  the  winter  months  a  certain  advantage, 
in  that  they  could  load  more  deeply  than  if  they  cleared  from  Philadel- 
phia or  a  port  north.  It  seems  that  the  insurance  companies  require 
that  the  vessel  shall  not  load  below  a  certain  line,  which  is  fixed  by  the 
Board  of  Trade  of  England.  This  line  is  the  same  for  all  ports  dur- 
ing the  summer  months,  but  during  the  winter  months  vessels  are  per- 
mitted to  load  deeper  when  they  clear  from  ports  south  of  Philadel- 
phia than  when  they  clear  from  Philadelphia  or  a  port  north,  the  line 
to  which  they  are  permitted  to  load  in  case  of  the  latter  ports  being 
known  as  ' '  the  north  Atlantic  winter  load-line. ' ' 

It  did  not  appear  just  what  the  value  of  this  privilege  available  at 
the  southern  ports  was.  It  would,  of  course,  depend  ui)()n  the  size  of 
the  vessel.  The  testimony  tended  to  show  that  with  the  ordinary  tramp 
steamer  which  engages  in  this  full  cargo  grain  business,  the  difference 
would  be  from  $200  to  $600  a  cargo. 

Baltimore  and  Philadelphia  asserted  that  they  were  under  disad- 
vantages as  compared  with  New  York  in  the  matter  of  distance  and  in 
the  ease  with  which  a  ship  put  to  sea  from  these  respective  ports.  Thus, 
it  is  from  Baltimore  to  the  ocean  something  like  150  miles,  and  after 
the  ocean  is  reached,  somewhat  farther  to  the  foreign  port.  In  the  case 
of  Philadelphia  low  water  interferes  with  a  ready  passage  out  to  sea, 
so  that  the  time  consumed  in  waiting  for  a  proper  tide  is  from  ten  to 
twenty-four  hours.  Now,  while  this  is  not  a  serious  matter,  neverthe- 
less, it  does  constitute  a  certain  disadvantage  in  case  of  these  two  ports, 
which  is  not  experienced  at  New  York. 


170  ATLANTIC    PORT   DIFFERENTIALS 

[626]  Upon  the  whole  we  are  of  the  opinion  that,  so  far  as  the  full 
cargo  business  is  concerned,  there  is  no  appreciable  difference  in  cost, 
and  no  appreciable  difference  in  the  ocean  rate  from  the  three  ports, 
New  York,  Baltimore  and  Philadelphia.  There  might  be  exceptional 
cases  or  exceptional  times  when  the  rate  would  rule  a  trifle  lower  from 
one  port  than  from  the  other,  but  we  are  satisfied  that,  taking  the  whole 
3'ear  together,  or  a  succession  of  years,  the  expense  and  the  rate  must 
be  substantially  the  same. 

Nor  are  we  able  to  find  that  the  conditions  in  respect  to  full  cargo 
ocean  rates  were  different  in  1882  than  they  are  to-day. 

Merchandise  is  said  to  be  carried  at  berth  rates  when  it  does  not  con- 
stitute the  entire  freight  cargo  of  the  vessel,  but  only  a  portion  of  it. 
Regular  lines  of  steamships  ply  between  all  the  ports  in  question  and 
European  grain  markets.  These  steamships  sometimes  carry  passen- 
gers, but  always  carry  freight,  and  their  cargoes  are  made  up  of  mis- 
cellaneous articles.  Some  articles  are  regarded  in  ocean  carriage,  as 
well  as  in  carriage  by  rail,  as  of  a  higher  class  than  others,  and  take  a 
higher  rate,  although  there  does  not  seem  to  be  the  same  difference 
upon  the  ocean  as  upon  the  railroad.  In  each  case,  however,  grain  is 
regarded  as  one  of  the  lowest  classes  of  freight,  and  bears  a  correspond- 
ingly low  freight  rate. 

The  testimony  showed  that  fluctuations  in  berth  rates  were  very 
great.  Taking  the  rate  on  wheat  for  an  illustration,  the  rate  might 
fluctuate  in  a  single  year  from  2  to  12  cents  per  bushel.  This  varia- 
tion is  occasioned  by  the  law  of  demand  and  supply.  The  regular  line 
steamer  is  advertised  to  leave  at  a  certain  date.  It  has  a  certain 
amount  of  freight  space,  and  the  expense  of  running  the  steamer  is 
practically  the  same  whether  loaded  with  freight  or  not.  Indeed,  until 
modern  construction  provided  a  water  ballast,  it  was  necessary  to  have 
a  certain  amount  of  freight  for  ballast  in  order  to  navigate  the  vessel. 
This  steamship,  as  the  time  for  sailing  approaches,  will  manifestly  sell 
its  space  for  whatever  price  it  can  obtain.  It  follows,  therefore,  that 
the  same  vessel  may  often  carry  freights  of  the  same  kind  at  different 
rates,  that  the  quoted  price  and  the  price  actually  paid  maj^  be  entirely 
diff'erent,  and  that  the  price  to-day  may  be  no  indication  of  the  price  a 
week  hence.  The  interveners  insist  [627]  that  while  New  York  may 
not  have  any  advantage  in  the  matter  of  cargo  rates,  it  has  an  enormous 
advantage  in  the  matter  of  berth  rates,  and  several  reasons  for  this  are 
shown. 

In  the  first  place  New  York  has  a  great  many  more  lines  than  either 
Boston,  Baltimore  or  Philadelphia,  indeed  a  great  many  more  than  all 
three  of  these  cities  taken  together.     These  lines  reach  many  foreign 


NEW  YORK  PRODUCE  EXCHANGE  V.  B.  &  O.  R.  R.,  ET  AL.  171 

ports  at  which  American  grain  is  bought  which  cannot  be  reached  from 
the  "outports"  so-called.  Steamers  sail  much  more  frequently  from 
New  York  to  all  foreign  markets  than  from  either  Baltimore  or  Phila- 
delphia. The  result  is  that  New  York  offers  much  better  facilities  in 
the  way  of  ocean  transportation  than  do  any  of  the  outports.  These 
additional  facilities  attract,  first  of  all,  the  higher  classes  of  freight, 
but  w^hen  that  freight  is  absorbed  the  residuum  of  the  berth  space 
which  is  available  for  the  transportation  of  lower  grades  of  freight, 
of  which  grain  is  the  principal  one,  is  always  large,  so  that  there  are 
usually  offerings  of  berth  space  in  New  York  much  in  excess  of  those 
at  any  other,  or  at  all  other  ports  for  the  transportation  of  grain.  That 
is,  not  only  can  grain  be  exported  from  New  York  by  berth  rate  to 
many  ports  not  available  to  Baltimore  and  Philadelphia,  but  it  can 
usually  be  transported  at  lower  rates  than  can  be  had  at  either  of  these 
cities.  Still  another  advantage  is  that  at  New  York  cargoes  of  different 
commodities  can  be  more  easily  made  up  than  at  the  outports  for  the 
reason  that  the  offerings  of  freight  at  New  York  for  a  particular  place 
are  much  larger.  As  already  indicated,  the  great  bulk  of  berth  rate 
business  is  done  by  regular  line  steamers,  but  considerable  business  of 
that  sort  is  done  by  steamships  sailing  at  irregular  intervals  whenever 
a  load  can  be  obtained.  These  vessels  take  various  kinds  of  commodi- 
ties but  usually  require  them  to  be  consigned  to  the  same  port.  It  is 
evident  that  in  New  York  a  steamer  of  this  kind  would  be  able  to  ob- 
tain a  cargo  for  a  particular  foreign  port  much  more  readily  than  at 
either  Baltimore  or  Philadelphia,  since,  as  w'ill  be  seen  hereafter,  the 
great  bulk  of  our  exports,  other  than  grain  and  flour,  move  out  through 
the  port  of  New  York. 

A  great  deal  of  testimony  w'as  introduced,  both  by  the  complainant 
and  by  the  interveners,  as  to  relative  berth  rates  from  the  four  ports, 
Boston,  New  York,  Baltimore  and  Philadelphia.  [628]  The  complain- 
ant introduced  three  tables,  showing  the  average  quoted  rates  in  cents 
per  bushel  on  wheat  from  these  four  ports,  covering  the  years  1882  to 
1896,  inclusive.  The  first  table  is  from  December  1st  to  April  30th, 
that  being  the  season  when  the  canal  is  closed ;  the  second  from  May 
1st  to  November  30th,  that  being  the  canal  season ;  and  the  third  table 
covering  the  entire  calendar  year.  These  tables  are  given  below,  and 
are  numbered  Tables  No.  1,  No.  2  and  No.  3: 


172 


ATLANTIC    PORT   DIFFERENTIALS 


Table  No.  1. 

Average  Ocean  Freights^  Quoted  ox  Wheat  from  the  uudermentioned  ports  to 

Liverpool,  for  the  Non-Canal  Season. 

December  1st  to  April  30th. 


Non- Canal   Season. 


1881-82 
1882-83 
1883-84 
1884-85 
1885-86 
1886-87 
1887-88 
1888-89 
1889-90 
1890-91 
1891-92 
1892-93 
1893-94 
1894-95 
1895-96 
1896-97 


New  York. 
Per  60  lbs. 


Boston. 
Per  60  lbs. 


Philadelphia. 
Per  60  lbs. 


Baltimore. 
Per  60  lbs. 


cents. 


*6 

5% 
8% 
5% 

61/2 

7% 
8% 
4% 
7% 
2% 
5% 
41.4 

5% 


cents. 


t5% 
91/4 
4% 

71/2 

3% 

6 

4 

61^, 

8% 
41/0 

6% 
21/2 
4% 
3% 
4V2 
6 14 


cents. 


8% 
1214 

6% 


*4i/8 

6^8 

5% 
5 

674 


cents. 


*7V2 

121/, 
TVs 
9% 
71/4 
71/4 
3% 

10 

101/2 

61/4 

8% 
41/4 
61/i 
5% 
51/^ 


^January  1st  to  April  30th  only. 
fJanuary  1st  to  March  31st  only. 
JReduced  from  sterling  quotations  on  the  basis  of  Id. =2  cents. 

Table  No.  2. 

Average  Ocean  Freights!  Quoted  on  Wheat  from  the  undermentioned  ports  to 
Liverpool,  for  the  Canal  Season. 

May  1st  to  November  30th. 


Canal    Season. 


New  York. 
Per  60  lbs. 


Boston. 
Per  60  lbs. 


[Philadelphia. 
I  Per  60  lbs. 


Baltimore. 
Per  60  lbs. 


1882 
1883 
1884 
1885 
1886 
1887 
1888 
1889 
1890 
1891 
1892 
1893 
1894 
1895 
1896 


cents. 


778 

7% 
71/2 
5% 
6% 
4% 

eys 

778 
278 
678 

4% 

51/2 

278 
478 

61/2 


cents. 


^7% 
514 
5 
4 

4% 
37s 
51/2 
6% 
2% 
5 
4 

4% 
178 
2% 
3% 


cents. 


6% 
3% 
41/4 

672 


cents. 


10% 
914 

SVs 
6 

71/2 
51/4 

7y8 

8% 
2% 
7 
6 1/2 

578 

3% 

4% 
6% 


*July  1st  to  November  30th  only. 

fRedueed  from  sterling  quotations  on  the  basis  of  ld.z=2  cents. 


new  york  produce  exchange  v.  b.  &  o.  r.  r.,  et  al. 
Table  No.  3. 


173 


Annual  Average  Ocean  Freights!  Q^^oted  on  Wheat  from  the  undermentioned 
ports  to  LiVERFOOL  for  the  Calendar  Year. 


Calendar  Year. 

New  York. 
Per  60  lbs. 

Boston. 
Per  60  lbs. 

Philadelphia. 
Per  60  lbs. 

Baltimore. 
Per  60  lbs. 

1882    

cents. 

7% 

8% 

7 

6% 

6% 

5 

5% 

7% 

4% 

sy* 

4% 

3%- 
5Vs 

cents. 

cents. 

cents. 
10 

1883    

6M> 
5 
5 
4% 

4  V:. 

51/2 

6% 

478 

5% 

4V. 

3% 

3 

3% 

414 

10  v^ 

1884    

778 

7% 

188.5    

1886    

7% 
6 

1887    

1888    

9 

1889    

1890    

5% 

1891    

6% 

1892    

6% 

1893    

1894    

1895    

1896    

5% 
4% 
4% 

5% 

5% 
4% 
4% 

674 

fEeduced  from  sterling  quotations  on  the  basis  of  Id. =2  cents. 

[630]  We  do  not  regard  these  tables  as  altogether  reliable,  although 
they  are  probably  the  best  that  could  be  furnished  under  the  circum- 
stances. In  most  instances  they  represent  the  quoted  rate ;  in  some, 
particularly  in  case  of  New  York,  they  stand  for  actual  engagements, 
and  show  the  price  actually  paid.  It  has  already  been  suggested  that 
the  quoted  price  and  the  actual  price  often  vary  considerably.  No 
data  at  all  are  available  apparently  in  case  of  Philadelphia  until  the 
year  1893,  and  those  from  Baltimore  are  extremely  unreliable. 

We  are  inclined  to  think,  taking  the  whole  testimony  in  the  case  to- 
gether, that  it  fairly  appears  that  there  is,  as  a  rule,  between  Boston 
and  New  York  a  difference  in  the  berth  rate  upon  grain  in  favor  of 
Boston,  and  that  this  difference  amounts  at  the  present  time  to  some- 
thing in  the  vicinity  of  1  cent  per  hundred  pounds;  that  there  is  a 
difference  in  favor  of  New  York  between  New  York  and  Philadelphia 
M'hich  amounts,  perhaps,  to  from  ly^  to  2  cents  per  hundred  pounds; 
and  that  about  the  same  difference  exists  against  Baltimore.  We  are 
unable  to  find  that  there  is  any  appreciable  difference  in  the  ocean 
berth  rate  from  Baltimore  and  Philadelphia.  We  are  inclined  to  think 
also  that  since  1882  this  difference  between  New  York  and  the  outports 
has  been  gradually  diminishing.  The  rates,  from  Boston  differed  f roin 
those  in  New  York  rather  more  in  1882  than  to-day,  and  the  same  thing 
appears  to  have  been  true  of  Baltimore  and  Philatlelphia.  From  the 
very  nature  of  the  case,  however,  no  definite  finding  in  this  respect  can 
be  made. 


174 


ATLANTIC    PORT   DIFFERENTIALS 


It  did  not  appear  why  the  rate  at  Boston  should  be  lower  than  at 
New  York,  save  that  the  dockage  expenses  and  other  port  charges  were 
somewhat  less  at  the  former  port.  The  Boston  steamers  are  inferior 
in  speed  and  in  capacity  to  New  York  steamers. 

No  testimony  was  introduced  showing  exactly  what  cargo  rates  had 
been  at  any  time  or  during  any  period.  It  appeared  generally  that 
they  were  ordinarily  higher  and  much  more  stable  than  berth  rates, 
and  that  a  cargo  business  could  not  be  done  until  the  berth  space  had 
been  exhausted  or  until  the  berth  rate  had  risen  to  a  point  above  the 
average. 

We  have  no  information  from  which  it  can  be  stated  what  the  rela- 
tive amount  of  cargo  and  berth  business  in  grain  has  been  for  any 
length  of  time  since  1882. 

[631]  With  the  exception  of  cargoes  from  New  York  to  a  particular 
point  which  is  hereafter  referred  to,  wheat  is  very  seldom  exported  by 
the  cargo.  Cargo  business  is  almost  entirely  confined  to  corn.  The 
complainant  introduced  a  table  showing  the  relative  amount  of  berth 
rate  and  cargo  exports  for  the  years  1895  and  1896  in  wheat  and  in 
corn.     This  table  is  given  below,  and  is  No.  4 : 

Table  No.  4. 

(Where  steamers  carried  both  wheat  and  corn,  they  have  been  counted  under 
each  head.) 

WHEAT. 


Exports, 
Bushels. 

1895. 

CARRIED  IN  GRAIN 

CARGOES. 

Exports, 
Bushels. 

CARGOES. 

CARRIED  IN  GRAIN 

189fl. 

PORTS. 

Bushels. 

a 

u 
S' 

o 

cs 

o 

6 

Bushels. 

a 

o 

cs 

O 
o 
6 

4,810,384 
20,339,263 
1,537,226 
3,977,261 
165,765 
1,185,400 

9,838,955 
18,476,263 
4,863.8^ 
6,589,856 

Boston    

6,707,934 
461,165 

33.0 
30.0 

66 
5 

4,056,878 
2,831,017 
2,085,199 

21.9 
58.2 
31.6 

55 

Philadelphia     

29 

Baltimore    

22 

Norfolk   

165,765 
361,431 

100.0 
30.5 

2 
6 

17,327 

Totals   

32,015,299 

7,696,295 

79 

39,786,287 

8,973,094 

106 

CORN. 


New  York   

19,626,817 
5,320,083 
3,307,413 
9,645,758 
3, .545, 363 
4,866,335 

892,051 

4.6 

10 

19,100,190 
5,893,209 
8,829,376 
26,382,182 
12,891,28i 
10,376,625 

1,797,082 

9.4 

24 

Boston    

Philadelphia     

524,818 

1,896,452 

incomplete 

2,278,872 

15.9 
19.7 

46.8 

5 
18 

22 

4,947,789 
10,297,059 
8,977,802 
5,042,104 

56.0 
39.0 
69.6 
48.6 

46 

Baltimore    

Norfolk     

81 

Newport  News    

Totals    

46,311,769 

•5,592,198 

•55 

83,472,867 

31,061,836 

300 

•Exclusive  of  Norfolk  for  1895,  which  cannot  be  given  from  any  data  In  our  possession. 


NEW  YORK  PRODUCE  EXCHANGE  V.  B.  &  O.  R.  R.,  ET  AIj 


175 


It  will  be  seen  from  an  examination  of  the  above  table  that  tiie  ex- 
ports for  1896  M^ere  somewhat  larger  in  wheat  and  almost  twice  as 
great  in  corn  as  in  1895 ;  that  what  may  be  called  the  excess  [632]  ex- 
ports of  1896  over  those  of  1895  went  mostly  hy  cargo  shipments,  and 
that  these  excess  cargo  shipments  were  almost  entirely  from  Philadel- 
phia, Baltimore,  Norfolk,  and  Newport  News.  The  complainant  in- 
troduced another  table  showing  the  number  of  cargoes  of  corn  ex- 
ported from  New  York,  Philadelphia  and  Baltimore  for  the  years  1893 
to  1896,  inclusive.     This  table  is  designated  as  No.  5  and  is  as  follows: 

Table  No.  5. 


New  York. 

Cargoes. 

Corn. 

Philadelphia. 

Cargoes. 

Corn. 

Baltimore. 

Cargoes. 

Corn. 

Totals. 

Cargoes. 

Corn. 

1893 
1894 
1895 
1896 

1 

2 

7 

19 

11 

7 
41 

7 

17 
13 
77 

19 

24 

27 

137 

Totals 

29 
cargoes. 

64 
cargoes. 

114 
cargoes. 

207 
cargoes. 

New  York  shipped  29  cargoes  corn,  equal  to  14%. 
Philadelphia     "64         "         "  "  31%. 

Baltimore  "114         "         "  "  55%. 

207  cargoes. 

From  this  it  appears  that  in  the  four  years  New  York  shipped  29 
cargoes;  Philadelphia,  64;  and  Baltimore,  114,  which  gives  New  York 
14  per  cent,  of  the  entire  cargo  business  for  that  series  of  years. 

Mr.  Neal,  a  witness  for  the  interveners,  testified  from  records  in  his 
possession  that  from  1878  to  1896  there  had  been  exported  from  the 
three  ports  in  all  1,357  full  cargoes  of  corn,  and  that  of  these  187  had 
gone  from  New  York,  499  from  Philadelphia,  and  671  from  Baltimore. 
This,  too,  would  give  New  York  in  that  series  of  years  just  14  per  cent, 
of  the  full  cargo  business. 

It  may  well  be  inquired  how,  in  view  of  the  differentials  and  in  view 
of  the  fact  that  full  cargo  rates  are  the  same  from  all  these  ports,  New 
York  manages  to  do  any  full  cargo  business.  It  appears  that  Boston 
under  the  operation  of  the  same  condition  of  things  does  not.  It  is  im- 
possible to  answer  this  question  with  certainty.  New  York  has  much 
the  largest  storage  capacity.  It  has  a  corn  market  and  a  wheat  market, 
and  stocks  of  corn  and  [633]  wheat  are  carried  for  delivery.  The  re- 
sult is  that  a  full  cargo  can  be  loaded  and  shipped  from  New  York 
quicker  than  from  the  other  ports,  and  very  often  cheaper,  as  the  price 
fluctuates  upon  the  Chicago  market. 


176  ATLANTIC    PORT   DIFFERENTIALS 

It  appears,  too,  with  reference  to  the  full  cargo  business  in  wheat, 
which  was  considerable  from  New  York  in  both  1895  and  1896,  that 
most  of  it  consisted  of  cargoes  for  Lisbon,  Portugal.  The  trade  at  that 
point  requires  a  New  York  bill  of  lading,  and  for  this  reason  shipments 
to  fill  those  orders  are  made  from  New  York,  although  the  same  grade 
of  wheat  could,  perhaps,  be  obtained  somewhat  more  cheaply  at  some 
other  port. 

The  complainant  claimed  that  if  the  object  of  these  differentials  was 
to  equalize  the  cost  of  exporting  grain  through  the  three  ports,  then 
the  cost  of  grain  in  Europe  should  be  the  same  by  each  port,  whereas, 
in  point  of  fact,  it  was  and  had  been  less  through  the  outports  than 
through  New  York. 

It  appeared  that  this  export  business  was  largely  done  by  grain 
brokers.  These  people  do  not  as  a  rule  own  the  grain  themselves  nor 
carry  stocks  from  which  their  orders  are  filled.  Upon  receiving  an 
order,  they  go  into  the  market  and  fill  it  at  the  least  price  possible. 
They  sometimes  sell  the  grain  on  board  the  vessel  on  this  side,  but  or- 
dinarily it  would  appear  that  their  price  includes  a  delivery  in  Europe. 
Agencies  are  often  maintained  by  them  in  Chicago,  and  it  appears  that 
they  purchase  grain  to  fill  export  orders  in  one  of  three  ways.  They 
may  purchase  the  corn  in  the  West,  paying  themselves  the  transporta- 
tion charges  to  the  seaboard  and  so  across  the  water.  They  may  buy 
the  grain  F.  0.  B.  the  vessel  at  some  American  port.  This  embraces 
all  the  charges  which  are  necessary  to  deliver  the  grain  upon  the  vessel, 
including  the  freight  rate  and  the  terminal  charge ;  or  they  may  pur- 
chase the  grain  what  is  called  C.  I.  F.  Europe.  These  three  letters 
signify  cost,  insurance  and  freight,  and  that  kind  of  a  contract  calls 
for  the  delivery  of  the  grain  in  Europe,  or  its  equivalent  in  insurance 
money  if  the  grain  is  lost.  It  appeared  that  these  brokers  themselves 
in  recent  times  had  almost  exclusively  confined  their  operations  to  the 
jiurchase  of  export  grain  either  F.  0.  B.  at  the  Atlantic  seaboard  or 
C.  I.  F.  Europe.  Although  their  agencies  still  continued  to  be  main- 
tained in  some  instances  in  the  West,  little  or  no  business  was  trans- 
acted through  them.  This  [634]  was  for  the  reason  that  they  could 
purchase  the  grain  F.  0.  B.  or  C.  I.  F.  cheaper  than  they  could  buy  it 
in  the  West  and  pay  the  transportation  charges  themselves. 

The  testimony  of  these  gentlemen  showed  that  the  price  of  grain 
F.  0.  B.  or  C.  I.  F.  was  not  at  all  times  the  same  through  the  different 
ports.  Sometimes  it  could  be  exported  cheaper  through  Baltimore; 
sometimes  through  Philadelphia ;  and  sometimes  through  New  York ; 
but,  on  the  whole,  the  preponderance  of  this  testimony  was  that  in  the 
year  1896  prices  had  ruled  cheaper  through  the  outports  than  through 
New  York. 


NEW  YORK  PRODUCE  EXCHANGE  V.  B.  &  O.  R.  R.,  ET  AL.  177 

We  attach  veiy  little  impoi'tance  to  this  testimony.  These  brokers 
have  no  stock  in  trade.  They  have  no  expensive  plant  which  they  must 
utilize  at  a  particular  point.  While  for  the  most  part  they  reside  and 
have  their  principal  place  of  business  in  New  York,  they  can,  with  al- 
most equal  convenience  do  business  through  any  one  of  the  three  ports. 
It  was  conceded  bj'  all  that  a  difference  in  cost  of  from  i/s  to  y^  of  a 
cent  a  bushel  Avould  divert  grain  from  one  port  to  the  other,  and  these 
brokers  always  know  what  grain  can  be  purchased  for  at  each  one  of 
these  three  ports.  The  conclusive  answer,  therefore,  to  the  inipiiry, 
through  which  port  at  a  particular  time  was  the  price  of  grain  C  I.  F. 
Europe  the  cheapest  is  found  in  observing  through  what  port  grain  at 
that  time  actually  moved. 

The  complainant  claimed  that  the  operation  of  these  differentials 
had  been  growing  more  and  more  burdensome  to  New  York  ever  since 
3882,  and  that  matters  had  come  to  that  pass  that  they  were  a  menace 
to  the  commerce  of  that  port,  and  in  confirmation  of  this  they  insti- 
tuted a  comparison  of  the  exports  of  the  commodities  in  question 
through  the  different  ports  for  the  years  1895  and  1896,  from  which  a 
very  striking  falling  off  at  New  York  appears. 

The  interveners  replied  that  while  a  comparison  of  the  year  1896 
with  the  year  1895  might  show  unfavorably  to  the  port  of  New  York, 
no  comparison  of  any  two  single  years  could  be  a  fair  test,  that  the 
differences  in  those  two  years  were  no  greater  than  might  be  observed 
between  some  other  two  preceding  years  if  properly  selected,  that  New 
York  had  not  lost  absolutely  but  only  relatively,  and  that  the  loss  to 
New  York  was  not  owing  to  any  gain  by  Baltimore  and  Philadelphia, 
but  to  the  fact  that  Norfolk,  Newport  News,  Galveston  and  New  Or- 
leans had  become  new  [635]  factors  in  the  export  situation,  owing  to 
the  opening  up  and  improvement  of  new  lines  of  transportation  to  these 
ports. 

As  bearing  upon  these  contending  claims  a  great  mass  of  statistics 
was  introduced  upon  both  sides.  All  of  this  matter  has  undoubtedly 
some  bearing  upon  this  question.  Much  of  it  is  interesting,  but  to  re- 
produce it  all,  or  to  even  consider  it  all  in  any  finding  of  fact,  giving 
to  each  piece  of  testimony  its  due  weight,  would  be  utterly  impossible. 
We  reproduce  here  sufficient  of  the  tables  introduced  by  the  respective 
parties  to  show  what  their  claims  were  and  the  nature  of  the  testimony 
upon  which  they  relied,  and  to  also  show  in  a  general  way  the  actual 
situation  at  these  respective  ports. 

The  following  is  a  table  showing  the  total  receipts  and  the  total  ex- 
ports of  flour,  wheat  and  corn  in  bushels  at  New  York,  Boston,  Phila- 
delphia, Baltimore,  Norfolk  and  Newport  News  for  the  years  1873  to 
1896,  inclusive.     It  is  marked  No.  6 ; 
12 


178 


ATI.zVNTIC    PORT   DIFFERENTIALS 


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NEW  YORK  PRODUCE  EXCHANGE  V.  B.  &  O.  R.  R.,  ET  AL. 


170 


[637]  The  table  below,  marked  No.  7,  states  the  relative  i)roportioiis 
oi'  the  total  receipts  of  tloiir  and  all  kinds  of  grain,  including  oats,  rye 
and  barle}^  in  bushels,  including  receipts  of  wheat,  corn,  oats,  rye  and 
barley,  at  the  four  named  Atlantic  ports  for  the  years  1878  to  1896, 
inclusive : 

TABLE  NO.  7. 


During 
year. 


New  York, 
per  cent. 


Boston, 
per  cent. 


Philadelphia, 
per  cent. 


Baltimore, 
per  cent. 


Total 
per  cent. 


1878 

55.7 

10.0 

16.9 

17.4 

100 

1879 

52.7 

10.6 

15.4 

21.3 

100 

1880 

53.4 

11.8 

15.9 

18.9 

100 

1881 

56.4 

14.4 

11.9 

17.3 

100 

1882  

59.3 

15.7 

10.9 

14.1 

100 

1883 

56.1 

17.0 

10.9 

16.0 

100 

1884 

56.3 

17.5 

10.6 

15.6 

100 

1885 

58.1 

15.2 

11.5 

15.2 

100 

1886 

57.3 

16.3 

9.8 

16.6 

100 

1887 

56 . 5 

14.9 

11.5 

17.1 

100 

1888 

57.6 

16.5 

9.8 

16.1 

100 

1889 

54.9 

15.2 

9.5 

20.4 

100 

1890 

51.5 

13.3 

15.7 

19.5 

100 

1891 

59.7 

12.7 

11.6 

16.0 

100 

1892  

52.2 

12.1 

18.0 

17.7 

100 

1893 

54.6 

15.2 

13.0 

17.2 

lOU 

1894 

52.6 

16.5 

14.6 

16.3 

100 

1895 

.53.6 

16.6 

12.9 

16.9 

100 

1896 

50.1 

14.7 

13.1 

22.1 

100 

Average  . . 

55.1 

14.5 

12.8 

17.4 

Below  is  given  the  same  table  with  the  addition  of  Norfolk  and  New- 
port News,  which  shows  the  extent  to  which  those  ports  have  become 
a  factor  in  the  situation  of  recent  years.  It  must  be  remembered  that 
the  exports  do  not  necessarily  correspond  with  the  receipts.  There  is 
at  New  York  for  example  an  enormous  domestic  consumption,  while 
at  Newport  News  there  is  practically  none. 


180 


ATLANTIC    PORT   DIFFERENTIALS 

Table  No.  8. 


During 

New  York, 

Boston. 

Phila. 

Baltimore, 

♦Norfolk, 

♦Newport 

News, 
per  cent. 

Total 

year. 

per  cent. 

per  cent. 

per  cent. 

per  cent. 

per  cent. 

per 
cent. 

1878   . . . 

55.7 

10.0 

16.9 

17.3 

0.1 

100 

1879   . .. 

52.7 

10.6 

15.4 

21.2 

0.1 

100 

1880   ... 

53.3 

11.8 

15.9 

18.9 

0.1 

100 

1881   ... 

56.3 

14.4 

11.9 

17.3 

0.1 

100 

1882    . . . 

59.1 

15.6 

10.9 

14.1 

o.'s 

100 

1883   ... 

55.8 

17.0 

10.9 

15.7 

o!2 

0.4 

100 

1884   . . . 

56.1 

17.4 

10.5 

15.5 

0.5 

100 

188.5   .  .  . 

57.8 

15.1 

11.5 

15.1 

0.5 

100 

1886   ... 

55.8 

15.9 

9.6 

16.2 

2.5 

100 

1887   ... 

55.7 

14.6 

11.4 

16.9 

0.2 

1.2 

100 

1888   . . . 

57.2 

16.4 

9.7 

16.0 

0.7 

100 

1889    . . . 

54.5 

15.1 

9.5 

20.3 

0.6 

100 

1890   ... 

50.6 

13.0 

15.4 

19.3 

1.8 

100 

1891   ... 

57.4 

12.2 

11.2 

15.4 

0.9 

2.9 

100 

1892   ... 

50.4 

11.7 

17.4 

17.1 

0.6 

2.8 

100 

1893   ... 

52.7 

14.6 

12.5 

16.6 

0.4 

3.2 

100 

1894   . . . 

50.0 

15.7 

13.9 

15.5 

0.5 

4.4 

100 

1895   ... 

49.8 

15.5 

12.0 

15.7 

1.7 

5.3 

100 

1896   . . . 

44.7 

13.2 

11.7 

19.7 

4.1 

6.6 

100 

*Total  receipts  at  Norfolk  and  Newport  News  not  procurable,  hence  the  quantity  exported 
has  been  taken  as  the  quantity  received. 

A  statement  was  prepared  under  the  direction  of  ]\Ir.  Blanchard, 
Commissioner  of  the  Joint  Traffic  Association,  showing  in  tons  the 
dead  freight  forwarded  by  the  defendants  to  the  points  named  for  the 
years  1888  to  1896,  inclusive.  From  that  statement  the  following 
statement  is  taken,  showing  these  facts  with  reference  to  flour,  grain 
and  mill  stuff,  provisions  and  lard,  and  also  showing  the  grand  total 
of  all  kinds  of  freight.     This  table  is  designated  as  No.  9 : 


NEW  YORK  PRODUCE  EXCHANGE  V.  B.  &  0.  R.  R.,  ET  AL. 


181 


Table  No.  9. 

FLOUE. 

Total  Tons  Forwarded  by  All  Roads  to 


Years. 

Balto.  & 
Vicinity. 

Boston   & 
Vicinity. 

N.    York   & 
Vicinity. 

Phila.  & 
Vicinity. 

Norfolk, 

N.  News, 

Kiehmond 

&    Vicinity. 

1888 

105,324 
25,812 
34,173 
26,235 
39,094 
33,530 
25,953 
32,126 
30,423 

42,402 
21,350 
19,818 
21,857 
31,193 
47,284 
27,179 
33,101 
29,818 

62,437 
41,923 
37,334 
45,966 
57,932 
73,275 
54,299 
85,565 
82,043 

39,754 
29,995 
25,144 
34,595 
40,861 
45,377 
25,953 
29,345 
31,420 

1889 

1890 

1891 

1892  .  . . . 

1893  .... 

1894 

1895 

1896   . . . . 

19,516 
13,833 
64,484 
73,297 

GRAIN  AND  MILL  STUFF. 


121,116 
140,578 
185,717 
96,003 
143,411 
106,184 
143,992 
129,153 
260.127 


179,073 
136,167 
175,200 
159,151 
149,263 
211,727 
223,426 
361,949 
365,172 


344,158 
319,292 

450,705 
457,912 
476,626 
415,450 
302,358 
410,433 
510,491 


155,528 
167,424 
382,923 
231,380 
265,353 
227,306 
230,179 
233,738 
172.876 


31,022 

35,510 

37,603 

161,556 


PROVISIONS  AND  LARD. 


29,506 
45,177 
74,743 
61,357 
55,367 
58,463 
70,140 
77,172 
74,862 


49,623 

130,744 

68,313 

206,473 

84,813 

217,292 

55,681 

158,440 

52,753 

151,419 

60,123 

183,551 

78,075 

236,996 

104,861 

297,255 

101,913 

201,358 

47,900 
49,260 
55,825 
48,751 
51,782 
51,682 
53,932 
52,215 
57.424 


15,574 
15,476 
20,054 
46,244 


GRAND  TOTAL. 


349,695 
341,150 
441,736 
306,965 
390,515 
353,568 
376,240 
380,496 
497,561 


381,237 
354,227 
412,593 
358,997 
370,169 
496,359 
.533,067 
743,900 
751,936 


792,647 

893,706 

1,021,768 

956,948 

969,132 

1,086,996 

1,023,372 

1,290,876 

1,293,663 


387,823 
410,384 
666,345 
451,348 
497,469 
466,719 
437,909 
464,842 
395,983 


81,808 

81,215 

140,763 

328,928 


182 


ATLANTIC    PORT    DIFFERENTIALS 


The  complainant  introduced  a  statement  showing  the  number  and 
tonnage  of  vessels  in  the  foreign  trade  which  entered  at  and  cleared 
from  the  ports  named  during  each  year  from  1882  to  1896,  inclusive. 
The  following  are  for  the  years  1882,  1886  and  1896  : 


Table  No.  10. 
1882. 


New  York   .  .  .  . 

Boston    

Philadelphia    .  . 
Baltimore    .... 

Norfolk    

Newport  News 


No. 
Entered. 


Tonnage. 


No. 
Cleared. 


6,525 

3,018 

1,313 

915 

53 


7,360,843 

1,416,231 

1,055,961 

852,575 

51.728 


6,180 

2,950 

1,156 

856 

140 


Tonnage. 


7,263,174 

1,305,172 

969,163 

802,627 

137,106 


1886. 


New  York   .  .  . 

Boston     

Philadelphia    . 
Baltimore   .  .  .  . 

Norfolk    

Newport  News 


5,719 

2,595 

1,348 

541 

63 

33 


5,558,938 

1,184,108 

1,155,066 

521,470 

56,483 

23,712 


5,388,335 
1,018,921 
895,486 
607,868 
145,092 
224.568 


New  York   .  .  .  . 

Boston    

Philadelphia    .  . 
Baltimore     .  . .  . 

Norfolk    

Newport  News 


1896. 


4,378 

2,194 

1,070 

613 

50 


6,911,782 
1,757,291 
1,421,081 

895,093 
63,095 

159,719 


4,065 
2,182 
936 
685 
154 
372 


6,552,614 
1,523,096 
1,214,683 
1,067,543 
203,058 
607,265 


The  years  1882  and  1896  were  selected  by  the  complainant  in  its 
brief  for  comparison.  Of  all  the  years  between  1882  and  1896  the 
tonnage  at  New  York  was  the  largest  in  1882  and  the  smallest  in  1886. 
These  three  years  give  a  fair  idea  of  the  way  in  which  the  tonnage  has 
averaged,  and  the  entire  statement  need  not  be  reproduced. 

The  interveners  upon  the  part  of  Baltimore  and  Philadelphia  also 
introduced  various  tables  showing  the  movement  of  the  articles  em- 
braced in  this  proceeding  from  all  ports  upon  the  Atlantic  coast  as  well 
as  from  these  ports  in  controversy. 

Table  No.  11  shows  the  total  export  of  wheat,  corn  and  oats  from  the 
ports  named  for  the  years  1878  to  1896  inclusive  and  the  percentage 
of  the  whole  for  each  port  and  also  for  each  commodity.  It  will  be  no- 
ticed that  this  table  includes  all  the  Atlantic  and  Gulf  ports  and  also 
the  port  of  Montreal. 


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188  ATLANTIC    PORT    DIFFERENTIALS 

[641]  The  complainant  claims  that  the  exportation  of  oats  for  the 
3^ear  1896  was  abnormally  large,  and  a  very  considerable  part  of  the 
total  export  seems  to  have  gone  out  through  the  port  of  New  York,  so 
that  the  percentage  in  favor  of  New  York  is  considerably  larger,  if  the 
three  grains  are  considered,  than  it  is  if  merely  wheat  and  corn  are 
taken  into  account.  Considering  only  wheat  and  corn  the  percentage 
of  New  York  for  the  year  1896  would  be  22.7,  while  that  for  the  other 
ports  remains  substantially  the  same.  The  differenital,  however,  ap- 
plies on  oats  as  well  as  other  grains,  and  we  can  see  no  reason  why  all 
grain  should  not  be  considered  in  the  tabulation  of  these  statistics. 

Table  No.  12  shows  the  exports  of  wheat,  corn  and  oats  from  the  At- 
lantic ports  named  for  the  years  1878  to  1896  inclusive,  with  the  per- 
centage from  each  of  these  ports.  This  is  similar  to  Table  No.  11,  ex- 
cept that  the  ports  of  Montreal,  New  Orleans  and  Galveston  are 
omitted. 


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190 


ATLANTIC    PORT    DIFFERENTIALS 


[643]   Table  No.  13  is  a  recapitulation  of  the  average  percentages  for 
these  different  ports  for  the  periods  named: 


Table  No.  13. 

Recapitulation. 


Ports. 


Summary  of  Percentages. 


1878  to  1881 
(inclusive) 


1882  to  1895 
(inclusive) 


1882  to  1896 
(inclusive) 


Portland    

Boston   

New  York  .  .  .  . 
Philadeliihia  .  . 
Baltimore    .  .  .  . 

Norfolk   

Newport  News 


0.91% 

7.00% 

51.76% 

15.13% 

25.05% 

.15% 

.00% 


100.00% 


1.08% 

8.18% 

53.00% 

10.95% 

22.95% 

0.76% 

3.08% 


100.00% 


1.01% 

8.. 53% 

51.16%, 

10.76% 

23.20% 

1.-59% 

3.75% 


100.0070 


Table  No.  14  shows  the  exports  of  wheat,  corn  and  oats  from  Boston, 
New  York,  Philadelphia  and  Baltimore  from  1878  to  1896,  inclusive, 
together  with  the  percentages,  in  each  case,  of  the  total  shipments  from 
these  four  ports.  Table  No.  15  shows  the  value  of  all  exports  from  Bos- 
ton, New  York,  Philadelphia,  Baltimore,  Norfolk  and  Newport  News 
for  the  years  1878  to  1896.  together  with  the  percentage  of  each  port  to 
the  whole.     These  tables  follow : 


NEW  YORK  PRODUCE  EXCHANGE  V.  B.  &  O.  R.  R.,  ET  AL 


191 


Table  No.  14. 

Shipments  of  Wheat,  Corn,  and  Oats  from  Boston,  New  York,  Philadelphia  and 
Baltimore  from  1878  to  1896,  inclusive.     Representing 

I'fiilnilcliiliia   roniinercial    l':xchange  Philadclphin   Oil  Trade  A.=soeiatioii    Hardware      Merehants'      and 

I'hiiadclphia    Hoar<)   of  'I'rade  Mastpr   Builders'   ICxeliange  Manufiieturors'  Association, 

Grocers'  and  Importers'  I';xchange  Mamitacturers'  Club  W.  B.  TUCKKR,   Sec'y, 

Fliiiadelpliia  l^roduce  ExcliaDge  'J'lic  'I'radcs  League  of  Philadelphia  The  Bourse,  Room  248. 


BOSTON. 

NKW    YORK. 

PHILA. 

1 

BALTIMORE. 

TOTALS. 

IST.s             

1          1 
53  510,363W  65.071 

8,954,449W 
19,6.52,8260 

10.89 
31.54 

19,766,074W 
16,543,8120 

24.01 
26.55 

82,230,886 

26,118,8920 

41.91 

62,315,580 

1 

Totals    

10,r)02,388 

6.77 

79,629,255 

51.36 

28,607,275 

18.45 

86,309,886 

23.43 

155,045,804 

1879    

60, 541, 234 W 
84,357,0570 

55.94 
49.38 

16,814,572Wi15.53 

30, 869, 104 W 
21,155,4220 

28.52 
30.42 

108,224,910 

1 

14,039,2280 

20.18 

69,551,707 

I          1 

Totals    

11,057,454 

5.85 

94,898,291 

50.25 

80,858,800 

16.34 

52,024,526 

27.55 

188,834,071 

18Sn    

11,263,79SW 

8.. 51 

74,863,083W 

56.. 56 

]1,312,.590W 
16,579,6450 

8.54 
23.99 

34,923,152Wi26.38 
14,604,3640   21.18 

132,362,623 

3,275,6650     4.74 

34,646,0890   50.13 

69,105,762 

Totals    

14,539,463 

7.22 

109,509,172 

54.35 

27,892,234 

I3.84I 

49,-527,516 

24.58 

201,468,385 

18S1 

3,162,540W 
8,006,0950 

4.52 
14.89 

38, 366, 185 W 
27,554,0770 

54.91 
51.26 

8,892  260W  1?.  79 

19,453,676W 
12,097,3760 

27.84 
22.50 

69  874  661 

6,099,4340 

11.34 

58,756,982 

Totals    

11,168,635 

9.08 

65,920,262 

58.32 

14,991,694 

12.12i 

31,551,052 

25.52 

123,631,643 

18S2    

2  843  493 W 

4.54 

36,670,191Wj58.58 
7,253,8950  '63.79 

5,852,951W 
808,5990 

9.35] 
7.10 

17, 238, 469W  27.53 
1,132,4070     9.96 

62,600,104 

2,174,3200 

19.12 

11,369,221 

Totals    

5,017,813 

6.78 

48,924,086      59.38 

6,661,550 

9.01 

18,365,876      24.83 

73,969,325 

1883      

1  989  748W 

4  79 

20,046, 29iw'48. 22 

22,849,5200  ,53.14 

4,096,297W 
5,304,9430 

9.85 
12.34 

15, 4.34, 689W  37.13 

10,285,8750   28.92 

41,567,025 
42,995,347 

4  555  009C  po  n9 

Totals    

6,544,757 

7.74 

42,895,811      50.72 

9,401,240 

11.11 

25,720,564 

80.41 

84,562,872 

1884    

1,639,, 596  W 
4,156,4830 

3.26 

20.44 

26,767,296Wi58.32 
9,442,2000   46.67 

5,o66,173W 
1,744,2520 

11.09 

8.57 

16  217  600W 

R9  SI 

50,190.667 
20,385,945 

4,948,0100  124.31 

Totals    

5,796,061 

8.21 

36,259,496      51.41 

7,310,425 

10.36 

21,160,610      30.00 

1 

70,526,612 

]8S>   

1, 680,022 W 
3,778,8230 

6.24 
7.41 

17, 111, 294W  63.60 
27,214,1890  j53.39 

3, 532. 192 W  13.18 
5,929,2440   11.63 

4  581  261 W  T^  0.'? 

96  904  769 

14,048,2870 

27.56 
23.92 

50,970,543 

Totals    

5,458,&i5 

7.01 

44,325,483 

56.92 

9,461,436     ll2.15 

18,629,548 

77,875,812 

1886    

2,376,298W 
3,025,6730 

4.65 

7.75 

32  090  610W 

fi9   «S 

6,079,146W  11.91 
1,857,3530     4.76 

10,475,395W 
13,138,2290 

•20.58 
33.67 

51  0^1  449 

20,996,7050   53.81 

39,017,960 

Totals    

5,401,971 

6.00 

53,067,815      58.96 

7,986,499        8.81 

23,613,624 

26.23 

90,089,409 

1887   

3,963,925W 
2,313,9580 

6.06 
9.74 

41, 886, 049W  63.75 

12,306,2720   51.85 

8,774,174Wil3.35 
1,996,5830     8.41 

11,057,290W 
7,115,8140 

16.83 
29.98 

65,701,488 

23,732,627 

Totals    

6,297,883 

7.04 

54,192,321 

60.59 

10,770,757 

12.04 

18,173,104 

20.32 

89,434,065 

1888    

1,210,666W 
3,245,8200 

6.4: 
14. 6£ 

12,609,242W:66.88 

949.844W 
859,3710 

5.08 
3.89 

4, 082, 508 W 
8,741,9140 

21. 6t 
16.94 

8,852.260 

14,236,1810 

64.46 

22,083,286 

Totals   ...... 

4,456,486 

10.8J 

26,845,423 

65.58 

1,809,215 

4.42 

7,824,422 

19.11 

40,985,546 

1889   

459,111W 
7,135,9330 

2.74 
12.61 

10,784,303W 
>     28,786,9770 

64.41 
51.05 

1,110,606W 
3,640,8160 

6.63 
6.45 

4,389,790W 
16,822,8080 

26.21 
29.8C 

16,743,810 

56,386,034 

Totals   

7,595,044 

10. 3f 

!     39,571,280 

54.11 

4,750,922 

6.49 

21,212,598 

29.01 

73,129,844 

1890   

525,287W 

4,500,7030 

515,8780 

2.K 
6.8« 
4.9; 

12,569,286W 

67.8? 

61 7, 876 W 

16,735,5210 

12,5870 

3.33 
25.63 
0.12 

4,803,453W 

19,447,1440 

617,0530 

25.9 

29.7^ 

5.9( 

18,515,902 

)     24,600,1470   37.68 
5;      9,301,0460   89.04 

65,283,515 

<> 

10,446,564 

Totals   

.       5,541,868 

5.8 

H    46,470.479 

149.31 

17,365,984 

18.42 

24,867,650 

26.3. 

.      94,245,981 

192 


ATLANTIC    PORT   DIFFERENTIALS 

Table  No.  14 —  ( Continued) . 


BOSTON. 


NEW  YORK. 


PHILA. 


BALTIMORE. 


TOTALS. 


Igf)l   

2,787,125W 

3,897,5650 
35.4060 

3.85 
16.56 
0.98 

46,957,113W 

64  98 

6,840, 503W 

2,606,6770 

300,8570 

9.46 
11.08 
8.70 

15,673, 334W 

3,852,9110 

5480 

21.69 
16.36 

72,258,075 

13,180,3980 
3,205,4660 

55.99 
90.25 

23,539,546 

,. 

3,. 551, 277 

Totals   

6,720,096 

6.76 

63,342,972 

63.75 

9,759,037 

9.82 

19,526,793 

19.65 

99,348,898 

1892    

7,501,903W 

2,971,8580 

73,7450 

8.86 
4.85 
1.64 

50,813,295W 
18,786,8010 
3,742,8120 

60.03 
30.67 
84.37 

9,762,594'W 

19,779,8760 

446,4780 

11.. 53 
32.29 
10.06 

16,567,652Wjl9.57 

19,707,2570  132.16 

172,2710     3.88 

84,645,444 

61,245,792 

•  > 

4,435,306 

Totals   

10,547,506 

7.02 

73,342,908 

48.79 

29,988,948 

19.95 

36,447,180      24.24 

150,326,542 

1893   

5,275,276W 

5,241,1700 

3,6510 

8.48 

18.05 

0.05 

38,047,932W 

61  18 

5,723,510W 

3,865,6330 

103,4000 

9.20 
13.31 
1.54 

13,141,293W|21.13 
7,122,3500  |24.53 
1,380,2-550  j20.64 

62,188,011 

12,802,0390 
5,197,0070 

44.09 
77.75 

29,031,192 

6,684,313 

Totals   

10,520,097 

10.74 

56,046,978 

57.24 

9,692,543 

9.90 

21,643,898     j22.ll 

97,903,516 

1SH4    

.5,S12,828W 

3,823,6350 

2,3500 

13.21 
15.00 
0.61 

25,141,494W 

11,406,7110 

382,8050 

57.16 
44.76 
99.34 

4,487,496W 

2, 577, .5400 
1690 

10.20 
10.11 

8,543,685W,19.42 
7,676,8620  30.12 

43,985,503 

25,484,748 

<• 

460 

385,370 

Totals   

9,638,813 

13.80 

36,931,010 

52.88 

7,065,205 

10.11 

16,220,593 

23.22 

69,855,621 

\f-<f   

7,3SO,391W 

5,281,0690 

1.520O 

19.. 52 
13.98 
0.09 

24,554,758W 
19,693,4710 
1,497,5870 

64.99 
52.15 

88.47 

1,885, 598 W 

3,140,9200 

59,4200 

4.96 
8.32 
3.51 

3,976,838W 
9,645,7580 

10.52 
25  54 

37,797,585 
37,761,218 

<i 

134,3180     7.93 

1,692,845 

Totals   

12,662,980 

16.39 

45,745,816 

59.21 

5,085,938 

6.58 

13,756,914      17.81 

1 

77,251,648 

18tJ6    

9,781,2.50W 
5,990,3970 
1,919,6770 

22.73 
10.09 
7.62 

21,766,950W 
18,861,7940 
15,880,1500 

50.57 
31.68 
63.12 

4, 902, 181 W 

8,934,4020 

438,8240 

11.38 
15.06 
1.74 

6,.588,559W|15.31 
25,602,6930   43.15 
6,919,5190   27.50 

43,038,940 

.59,329,286 

25,158,170 

Totals   

17,691,324 

13.82 

56,448,894 

44.26 

14,275,407 

11.19 

39,110,771 

36.67 

127,526,396 

new  york  produce  exchange  v.  b.  &  o.  r.  r.,  et  al.  193 

Table  No.  15. 


1878. 

1879. 

1880. 

1881. 

Dollars. 

Per 
cent. 

Dollars. 

Per 
cent. 

Dollars. 

Per 
cent. 

Dollars. 

Per 
cent. 

Philadelphia   

44,.508.08fl 
327,226.478 
46,542,044 
45,492,527 
8,693,680 

9.42 
69.26 
9.85 
9.63 
1.84 

47,013,751 

9.59 

49.612  195 

8.50 

44  1.17  996 

7  35 

327,796,819 
48,100,019 

66.87,  385,506,602 
9.8l!     58,023,587 

66.071  393.6.58,204 
9.951     72,100,193 

13.06'     72,444,413 
2.42      17,864,790 

65.59 

Boston    

12.01 

57,474,495 
9,830,352 

11.72;     76,220,870 
2.01      14,065,455 

12.07 

Norfolk   

Newport   News    

2.98 

1882. 

1883. 

1884. 

1885. 

Dollars. 

Per 

cent. 

Dollars. 

Per 

cent. 

Dollars. 

Per 
cent. 

Dollars. 

Per 
cent. 

Philadelphia   

37,957,661 

332,102,136 

61,614.526 

39,412,642 

17,730,532 

7.77 
67.94 
12.60 
8.06 
3.63 

38,132,145 
347,308,334 
61,273,101 

54,956,050 
18,445,548 

7.33 
66.77 
11.78 
10.57 

3.55 

36,467,799 
320,016,246 
62,528,000 
43,064,217 
12,353,256 

7.69 
67.45 
13.18 
9.08 
2.60 

38,642,516 
334,718,227 
61,378.633 
45,041,634 
14,797,181 

7.81 

New  York    

67.68 
12.41 

9.11 

Norfolk   

2.99 

1886. 

1887. 

1888. 

1889. 

Dollars. 

Per 
cent. 

Dollars. 

Per 
cent. 

Dollars. 

Per 
cent. 

Dollars. 

Per 
cent. 

33,719,861 
304,496,611 
53,428.513 
35,844.829 
11,656,137 

7.68 

.35.361.876 

7.57 

28.733,415 
301,486,784 
55,482,664 
46,212,036 
12,289,110 

6.47 
67.87 
12.49 
10.40 

2.77 

29,707,437 
312,542,283 
63,868,409 
.50,602,996 
13,841,897 

6.29 

69.34    306.842.375!  65.72 

66.13 

12.17 
8.16 
2.65 

57,775,156'  12.38 

13.94 

51,601,118 
15,310,247 

11.05 
3.28 

10.71 

Norfolk   

2.93 

1890. 

1891. 

1892. 

1893. 

Dollars. 

Per 
cent. 

Dollars. 

Per 
cent. 

Dollars. 

Per 
cent. 

Dollars. 

Per 

cent. 

37,239,820 

6.85 

33,438,639 
338,9.58,649 
76,719,517 
64,356,479 
16,475,752 
10,961,744 

6.18 
62.66 
14.18 
11.90 
3.05 
2.03 

58,460,926 
406,021,581 
86,611,526 

8.63 
.59.97 
12.78 

49,374,447 

8.78 

New  York 

341,332,396 
70,364.955 

62.78 
12.94 

339,787,339'  60.44 
84,595,159    15.05 

73,964,802:  13.60 
13,841,897     2.55 
6,958,369!     1.28 

98,799,890    14.58      71,482,652    12.71 

Norfolk   . .   

13,065,537|     1.92       8,877,226     1.58 
14,444,3671     2.10,       8,113,714;     1.44 

1 

1 

13 


194 


ATLANTIC    PORT   DIFFERENTIALS 

Table  No.  15 — (Continued). 


1894. 

1895. 

1896. 

Dollars. 

Per 
cent. 

Dollars. 

Per 
cent. 

Dollars. 

Per 
cent. 

40,280,353 
359,230,901 
82,841,346 
78,340,983 
10,353,-597 
14,337,597 

6.88     38,345,970 

7.31 

43,861,275 

7.68 

61.37'  317,994,574    60.62 

14.15,     85,035,218|  16.21 

13.38     61,894,818   11.80 

1.77,       7,792,572      1.49 

2.45     13,469,541     2.57 

344,35.5,492    60.34 

94,638,178|  16.58 

66,363,273    11. &3 

6,761,484     1.19 

14,755,676     2.58 

NEW  YORK  PRODUCE  EXCHANGE  V.  B.  &  O.  R,  R.,  ET  AL.  195 

[645]  Table  No.  16  shows  the  total  exports  of  provisions,  including 
beef,  canned,  salted  and  fresh;  bacon,  hams,  pork,  lard,  mutton  and 
tallow  for  the  years  1892  to  1896,  inclusive,  at  the  ports  named: 

Table  No.  16. 

NEW  YORK. 

1892    887,836,620  lbs. 

1893    804,765,036    ' ' 

1894    778,758,027    ' ' 

1895    770,718,476    " 

1896 766,227,891    ' ' 

BALTIMORE. 

1892  157,383,519  lbs. 

1893  88,567,714  ' ' 

1894  125,220,538  ' ' 

1895  143,705,570  ' ' 

1896 141,037,642  ' ' 

PHILADELPHIA. 

1892    64,802,181  lbs. 

1893    76,751,046    " 

1894    64,426,543    ' ' 

1895    52,940,973    ' ' 

1896    62,920,448    ' ' 

BOSTON. 

1892  384,779,993  lbs. 

1893  368,908,074  ' ' 

1894  346,687,323  ' ' 

1895  397,863,666  ' ' 

1896  418,743,485  ' ' 

NEWPORT  NEWS. 

1892  7,899,766  lbs. 

1893  290,386  " 

1894  6,788,410  " 

1895  10,111,046  " 

1896  21,866,968  " 

NORFOLK. 

1892  293,507  lbs. 

1893  1,293,250  ' ' 

1894  116,800  " 

1895  163,500  ' ' 

1896  137,800  " 


196 


ATLANTIC    PORT   DIFFERENTIALS 


Table  No.  17  shows  the  exports  of  flour  in  barrels  from  Boston,  New 
York,  Philadelphia,  and  Baltimore  for  the  years  1886  to  1896,  inclu- 
sive : 

Table  No.  17. 


Year. 

Boston. 

New  York. 

Philadelphia. 

Baltimore. 

1886    

2,083,732 

3,466,843 

386,162 

1,662,502 

1887    

2,058,321 

4,431,100 

603,093 

3,081,246 

1888    

1,493,460 

3,820,274 

670,439 

2,417,874 

1889    

1,222,851 

3,710,565 

554,370 

2,332,805 

1890    

1,289,297 

3,693,598 

834,480 

2,624,282 

1891    

1,558,673 

4,128,360 

1,156,342 

2,703,715 

1892    

2,090,720 

6,034,260 

1,843,647 

3,661,623 

1893    

1,855,471 

6,047,931 

1,376,434 

3,331,374 

1894    

2,103,422 

6,292,106 

1,277,767 

2,943,562 

1895    

1,433,157 

4,516,145 

903,122 

2,539,981 

1896    

1,457,526 

4,817,439 

654,126 

3,065,845 

NEW  YORK  PRODUCE  EXCHANGE  V.  B.  &  0.  R.  R.,  ET  AL. 


197 


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198 


ATLANTIC    PORT    DIFFERENTIALS 


[648]  We  have  caused  to  be  compiled  from  the  government  records 
the  following  table,  marked  No.  19,  showing  the  total  value  of  all  im- 
ports and  exports  through  the  Atlantic  and  Gulf  ports  for  the  years 
1895,  1896,  and  1897,  together  with  the  percentage  of  each  port  to  the 
entire  group  for  the  year  1897,  and  also  the  percentage  of  each  port  to 
the  total  imports  and  exports  of  the  United  States  for  the  same  year : 

Table  No.  19. 
IMPOKTS. 


Ports. 


1895. 


1896. 


1897. 


P.Ct. 
Total. 


P.Ct. 
Group. 


Boston 

New  York  .  . .  . 
Philadelphia  .  . 
Baltimore    .  .  .  . 

Norfolk   

Newport  News 
New  Orleans  .  . 
Galveston    .  . .  . 

Total   

Boston 

New  York   .  .  . 
Philadelphia  .  . 
Baltimore    .  .  .  . 

Norfolk   

Newport  News 
New  Orleans  . 
Galveston    ... 

Total   


$66,889,118 

477,741,128 

48,802,676 

12,260,706 

268,330 

1,032,849 

13,861,507 

369,575 


$79,179,864 

499,932,792 

43,840,836 

13,476,630 

219,350 

1,131,628 

13,471,142 

602,770 


$90,178,419 

11 

80 

480,603,580 

62 

85 

48,072,672 

6 

29 

11,371,193 

1 

49 

121,858 

02 

1,169,315 

15 

16,618,727 

2 

17 

779,101 

10 

$648,914,865 

84 

87 

13 

89 

74 

06 

7 

41 

1 

75 

02 

18 

2 

57 

12 

100.00 


EXPORTS. 


$85,505,196 
325,580,062 
35,043,093 
61,938,991 
7,792,572 
13,469,541 
68,413,362 
41,886,651 


$95,851,004 
354,274,941 
39,567,376 
66,398,905 
6,761,484 
14,850,117 
80,986,791 
36.397.091 


$100,857,281 
391,679,907 
47,305,273 
85,692,651 
18,581,532 
22,109,575 
101,494,120 
58.198.174 


$825,918,513 


9. 
37. 
4. 
8. 
1. 
2. 

9. 
5. 


60 

12.22 

27 

47.43 

51 

5.72 

15 

10.37 

77 

2.25 

10 

2.68 

66 

12.29 

54 

7.04 

60 

100.00 

The  complainant  contends  that  an  inspection  of  all  these  statistics 
shows  that  since  1882  the  export  business  in  grain  and  provisions  has 
been  gradually  leaving  the  port  of  New  York  and  that  this  is  especially 
marked  in  the  year  1896.  In  explanation  of  this  last  named  fact,  it 
further  contends  that  during  most  of  the  time  the  differentials,  while 
existing  nominally,  have  not  in  reality  been  maintained,  but  that  be- 
ginning with  1896,  they  were  rigorously  maintained  and  that  for  that 
reason  the  result  in  1896  [649]  is  a  fair  test  of  what  differentials  will 
do,  and  conclusively  demonstrates  their  unfairness. 

Several  witnesses  were  introduced  who  testified  that  rates  generally 
were  not  maintained,  and  that  probably  means  that  the  differentials 
were  not  maintained.     For  the  purpose  of  showing,  however,  that  they 


NEW  YORK  PRODUCE  EXCHANGE  V.  B.  &  O.  R.  R.,  ET  AL.  199 

were  maintained  in  1896,  the  complainants  introduced  George  R. 
Blancliard,  commissioner  of  the  Joint  Traffic  Association,  who  testified, 
in  substance,  that  after  the  taking  effect  of  the  Joint  Traffic  Associa- 
tion agreement,  on  the  1st  of  January,  1896,  rates  were  better  main- 
tained than  tliey  had  been  at  any  time  for  a  kmg  period  except  for 
something  like  a  year  or  a  year  and  a  half  after  tiie  Act  to  Regulate 
Commerce  went  into  effect,  which  was  April  1,  1887.  Mr.  Blanchard 
did  not  profess  to  say  that  at  the  time  of  the  giving  of  his  testimony, 
about  IMarch  16,  1897,  rates  were  being  maintained,  nor  did  he  dis- 
tinctly state  how  long  they  had  been  maintained,  nor  the  extent  to 
which  they  had  been  maintained,  but  simply  gave  his  impression  in 
general  that  they  were  better  observed  in  1896  than  at  any  other  period, 
except  a  year  or  thereabouts  immediately  following  the  enactment  of 
the  Interstate  Commerce  Law. 

There  is  no  testimony  in  this  case,  and  we  have  no  information  from 
which  we  can  form  even  a  reasonable  conjecture  as  to  the  extent  to 
which  these  differentials  have  been  on  the  whole  ignored  from  1882 
down.  It  seelns  to  be  tacitly  admitted  that  they  have  been  to  some  ex- 
tent, some  witnesses  thought  to  a  great  extent.  The  testimony  upon 
this  subject  was  only  fragmentary.  It  applied  to  no  definite  time  and 
it  gave  no  definite  figures.  It  was  simply  an  impression.  There  was, 
however,  tey  cimony  in  the  case  which  tended  to  show  that  during  the 
year  1896  and  in  the  early  part  of  the  year  1897  these  rates  were  not 
maintained.  Witnesses  testified  that  corn  F.  0.  B.  the  vessel  could  be 
and  had  been  bought  at  Baltimore  and  Philadelphia  for  between  3  and 
4  cents  a  bushel  less  than  it  could  be  bought  for  in  New  York.  Other 
Vvitnesses  testified  that  at  times  corn  could  be  purchased  F.  O.  B.  New 
York  cheaper  than  it  could  be  at  the  outports.  The  differential  is  2 
cents  per  hundred  in  favor  of  Philadelphia  and  3  cents  in  favor  of 
Baltimore.  This  would,  roughly  speaking,  amount  to  1  cent  a  bushel 
on  corn  to  Philadelphia  and  l^^  cents  a  bushel  to  Baltimore.  The  dif- 
ferential, therefore,  would  not  [650]  account  for  the  difference  in  price 
between  those  ports  and  New  York,  nor  would  anything  else  account 
for  it,  except  the  fact  that  a  better  freight  rate  was  obtained  to  those 
ports  for  the  time  being.  The  fact  that  export  dealers,  having  houses 
in  Chicago  where  they  could  buy  the  corn  and  pay  their  own  transpor- 
tation charges  and  where  in  past  years  they  had  to  a  very  considerable 
extent  transacted  this  business,  did  not  during  the  year  1896  buy  corn 
there  at  all,  because  they  found  it  cheaper  to  buy  it  upon  the  seaboard, 
indicates  that  the  rate  charged  was  not  the  open  and  published  rate, 
but  that  the  persons  of  whom  tliey  purchased  corn  at  the  seaboard  en- 
joyed certain  advantages  in  the  way  of  transportation  facilities  which 


200  ATLANTIC    PORT   DIFPER]ENTlA"Lg 

they  did  not  enjoy.  The  Joint  Traffic  Association  was  formed  for  the 
purpose  among  others,  of  maintaining  the  published  rates,  and  the 
members  of  that  association  undoubtedly  entered  upon  the  execution 
of  that  agreement  with  the  resolution  that  rates  should  be  maintained. 
That,  together  with  the  machinery  of  the  association,  undoubtedly  re- 
sulted in  the  better  maintenance  of  rates  for  a  time,  but  for  how  long 
a  time  it  is  altogether  impossible  to  say  from  any  testimony  before  us. 
There  is  nothing  in  this  case  upon  which  any  finding  of  value  as  to  the 
maintenance  of  rates  at  one  time  and  their  non-maintenance  at  another 
time  can  be  based,  and  we  cannot  undertake  to  make  any  finding  of 
that  sort. 

The  testimony  upon  the  part  of  Baltimore  tended  to  show  that  the 
Baltimore  &  Ohio  Railroad  during  the  years  1893,  1894  and  1895,  and 
possibly  some  preceding  years,  was  so  crippled  financially  that  it  was 
in  no  position  to  compete  actively  with  other  lines  for  this  business,  but 
that  in  1896,  owing  to  large  expenditures  by  the  receivers,  it  did  be- 
come able  to  enter  such  active  competition.  The  probability  would 
seem  to  be  that  these  different  lines  leading  from  the  West  to  the  sea- 
board have  felt  themselves  entitled  to  about  a  certain  part  of  this  busi- 
ness. When  they  have  been  able  to  obtain  that  at  the  tariff  rate  the 
tariff  rate  has  been  maintained.  When,  in  order  to  obtain  the  busi- 
ness, it  has  been  necessary  to  reduce  the  tariff  rate,  it  has  been  reduced. 
When  the  Baltimore  &  Ohio  Railroad  was  in  shape  to  do  the  business 
it  got  the  business  to  do,  and  every  other  line  in  the  same  way. 

The  complainant  alleged  that  New  York  enjoyed  certain  [651]  ad- 
vantages which  entitled  it  to  the  larger  share  of  this  export  business. 
The  interveners  insisted  that  the  port  of  New  York  labored  under  cer- 
tain disadvantages.  Some  of  these  relative  advantages  and  disad- 
vantages have  been  referred  to.  New  York  has  the  largest  and  most 
accessible  harbor,  but,  upon  the  other  hand,  its  port  charges  are  heavy. 
Its  advantages  arising  from  the  great  accumulation  of  wealth  and  con- 
centration of  business  at  that  point  need  not  be  referred  to  here.  They 
are  matters  of  common  notoriety,  and  the  extent  to  which  New  York 
enjoys  those  advantages  abundantly  appears  from  the  tables  herein- 
before given.  There  are  certain  elements  which  may  be  peculiar  to  the 
handling  of  grain  and  which  perhaps  ought  to  be  especially  referred  to. 

The  first  of  these  is  the  elevator  storage  capacity. 

That  of  the  four  ports  is,  in  bushels,  about  as  follows : 

New  York 30,075,000 

Boston   4,550,000 

Philadelphia   3,925,000 

Baltimore    5,350,000 


NEW  YORK  PRODUCE  EXCHANGE  V.  B.  &  0.  R.  R.,  ET  AL.  201 

Practically  all  the  storage  capacity  at  Boston,  Philadelphia  and  Bal- 
timore is  owned  by  the  railroad  companies,  while  at  New  York  private 
companies  own  24,075,000  bushels.  This  great  storage  capacity  in  and 
around  New  York  enables  the  carrying  by  private  parties  for  innne- 
diate  delivery  of  very  considerable  stocks  of  grain,  and  the  testimony 
showed  that  grain,  especially  wheat,  was  so  carried  to  a  very  considera- 
ble extent.  New  York,  as  already  said,  has  a  grain  market  of  its  own, 
and  it  is  possible  to  buy  there  at  almost  any  time  for  immediate  de- 
livery. The  great  storage  capacity  at  New  York  also  permits  the  bring- 
ing of  grain  during  the  canal  season  and  the  storing  of  it  against  the 
time  when  it  must  be  brought  in  upon  the  higher  all-rail  rates. 

The  canal  gives  New^  York  another  advantage  to  the  benefit  of  whieli 
it  strenuously  insisted  it  was  entitled.  It  is  well  known  that  grain  can  be 
brought  via  the  Great  Lakes  and  the  Erie  Canal  to  New  York  by  water, 
and  that  the  cost  of  transportation  by  this  means  has  heretofore  been 
ordinarily  considerably  less  than  by  rail.  The  comparative  water  and 
rail  rates  from  1878  to  1896,  inclusive,  appear  in  the  following  tables. 
The  first  of  these.  No.  20,  states  the  rates  per  bushel  by  lake  from  Chi- 
cago to  Buffalo  [652]  and  by  canal  from  Buffalo  to  New  York  on  wheat 
and  corn.  The  second.  No.  21,  gives  a  combination  of  these  two  rates, 
showing  the  total  rate  per  bushel  by  water  from  Chicago  to  New  Y'^ork. 
This  last  rate  is  exclusive  of  elevator  charges.  The  third  table,  No. 
22,  gives  the  average  rail  rate  for  the  same  period  from  Chicago  to 
New  York  by  the  bushel,  while  No.  23  states  the  same  rates  by  the  hun- 
dred pounds. 


202 


ATLANTIC    PORT   DIFFERENTIALS 


Table  No.  20. 
Season  Averages  of  Lake  and  Canal  Freights  from  1878  to  1896, 


INCLUSIVE. 

Chicago  to  Buffalo. 

Buffalo  to  New  York. 

Lake. 

Canal. 

Wlieat,  60  lbs. 

Corn,  56  lbs. 

Wheat,  60  lbs. 

Corn,  56  lbs. 

Cents. 

Cents. 

Cents. 

Cents. 

Season  1878    .  . . 

3.07 

2.85 

6.08 

5.46 

1879     .  .  . 

4.74 

4.27 

6.86 

6.17 

1880     ... 

5.76 

5.34 

6.51 

5.80 

'        1881     ... 

3.44 

2.97 

4.75 

4.30 

1882     ... 

2.50 

2.29 

5.39 

4.94 

1883    ... 

3.41 

3.10 

4.96 

4.56 

1884    .  .  . 

2.18 

1.94 

4.13 

3.70 

1885     .  . . 

2.02 

1 .  83 

3.85 

3.55 

1886    .  .  . 

3.68 

3.42 

5.03 

4.56 

1887     .  .  . 

4.13 

3.82 

4.38 

4.06 

1888     .  .  . 

2.56 

2.32 

3.37 

3.09 

1889     .  . . 

2.51 

2.26 

4.38 

3.93 

1890    .  . . 

1.96 

1.69 

3.89 

3.41 

1891     ... 

2.38 

2.20 

3.. 58 

3.16 

1892    .  . . 

2.19 

1.94 

3.42 

3.09 

1893     .  .  . 

1 .  66 

1.45 

4.65 

4.26 

1894    ... 

1.27 

1.13 

3.17 

2.86 

'        189.5    .  . . 

1.92 

1.76 

2.19 

1.95 

1896    .  .  . 

1.58 

1.42 

3.71 

3.51 

Table  No.  21. 
Season  Averages  of  Lake  and  Canal  Freights  prom  1878  to  1896, 

inclusive. 


Chicago  to  New  York, 
VIA  Buffalo. 

Wheat  60  lbs.  I  Corn,  56  lbs. 
Cents.        1         Cents. 


Season  1878    

9.15 

8.31 

1879    

11.60 

10.44 

"        1880    

12.27 

11.14 

1881    

8.19 

7.26 

1882    

7.89 

7.23 

"        1883    

8.37 

7.66 

"        1884    

6.31 

5.64 

1885    

5.87 

5.38 

"        1886    

8.71 

7.98 

1887    

•     8.51 

7.88 

"        1888    

5.93 
6.89 

5.41 

1889    

6.19 

"        1890    

5.85 

5.10 

"        1891    

5.96 

5.36 

"        1892    

5.61 

5.03 

' '        1893    

6.32 

5.72 

1894    

4.44 

3.99 

"        1895    

4.11 

3.71 

"        1896    

5.29 

4.93 

NEW  YORK  PRODUCE  EXCH-tiNGE  V.  B.  &  0.  R.  R.,  ET  AL.  203 


Table  No,  22. 
Statement  showing  the  average  rail  rate  on  wlieat  and  corn  from  1S78 
to  189G,  inclusive.     Kates  in  cents  per  bushel. 


From  Chicago  to  New  Yoek 
VIA  All  Eail. 

Year. 

Wheat. 

Corn. 

1878 
1879 
1880 
1881 
1882 
1883 
1884 
1885 
1886 
1887 
1888 
1889 
1890 
1891 
1892 
1893 
1894 
1895 
1896 


17.62 

16.44 

17.36 

16.20 

19.65 

18.34 

15.02 

12.84 

14.66 

12.85 

16.18 

15.10 

13.57 

12.67 

12.89 

12.03 

15.09 

14.08 

15.67 

14.63 

14.71 

13.73 

14.85 

12.69 

14.39 

11.35 

15. 

14. 

14.09 

13.15 

14.74 

13.75 

12.38 

11.56 

12.17 

11.36 

11.11 

10.37 

Table  No.  23. 
Statement  showing  the  average  rail  rate  on  wheat  and  corn  from  1878 
to  1896,  inclusive.     Rates  in  cents  per  hundred  pounds. 


From  Chicago  to  New  York 
via  All  Rail. 


Year. 


Wheat. 


Corn. 


1878 

29.36 

28.93 

32.75 

25.03 

24.43 

26.96 

22.62 

21.48 

25.15 

26.12 

24.52 

24.75 

23.99 

25. 

23.49 

24.56 

20.64 

20.29 

18.52 

29  36 

1879    

28.93 

1880   

32.75 

1881    

22.92 

1882 

22  95 

1883    

26 .  90 

1884    

22.62 

1885   

21.48 

1886    

25.15 

1887    

26.12 

1888    

94  52 

1889    

22.66 

1890   

20.26 

1891    

25. 

1892   

23.49 

1893    

24.56 

1894 

20.64 

1895 

20.29 

1896    

18.52 

204  ATLANTIC    PORT   DIFFERENTIALS 

In  comieetioii  with  the  subject  of  the  canal  and  canal  rates,  it  is 
proper  to  notice  the  testimony  of  I\Ir.  Depuy,  the  owner  of  a  fleet  of 
canal  boats,  who  asked  leave  to  appear  before  the  Commission  in  this 
matter, 

Mr.  Depuy  stated  that  the  elevator  charges  at  Buffalo  and  at  New 
York  were  a  most  serious  handicap  to  the  transportation  of  grain  by 
canal,  and  that  these  charges  were  to  a  very  considerable  extent  illegal 
and  excessive. 

The  statute  of  New  York  fixes  %  of  a  cent  per  bushel  as  the  charge 
for  elevating  grain  in  that  State.  It  is  not  possil)le,  however,  to  obtain 
the  transfer  of  grain  at  Buffalo  from  a  lake  vessel  to  a  canal  boat  for 
that  price.  In  addition  to  the  %  of  a  cent  a  charge  of  I/4  of  a  cent  for 
storage  and  $1.65  per  thousand  bushels  for  trimming  is  made.  These 
amount  upon  a  hundred  thousand  bushels  to  $415.  The  legal  charge 
for  rendering  that  service,  according  to  the  claim  of  Mr.  Depuy,  would 
be  $625,  while  the  actual  charge  for  transferring  100,000  bushels  from 
the  vessel  to  the  canal  boat  is  $1,040. 

At  New  York,  the  grain  is  sometimes  stored  in  private  ware-  [655] 
houses  and  sometimes  placed  directly  upon  the  vessel.  If  stored  not 
to  exceed  ten  days  in  a  private  warehouse,  and  from  thence  taken  and 
put  into  the  vessel,  the  cost  per  100,000  bushels,  according  to  Mr. 
Depuy,  is  $1,812.50.  If  it  goes  directly  from  the  canal  boat  into  the 
vessel  the  cost  for  the  100,000  bushels  is  $1,250,  which  is  the  charge 
made  by  the  floating  elevator  for  transferring  the  grain  from  the  canal 
boat  to  the  vessel.  Of  this  charge  Mr.  Depuy  says  that  $625  is  legal 
and  the  balance  illegal.  The  floating  elevator  charges  %  of  a  cent  for 
elevating,  %  of  a  cent  for  trimming  and  I/2  cent  per  bushel  for  moving 
the  elevator  from  place  to  place,  making  in  all  a  charge  of  II/4  cents  per 
bushel  as  against  the  statutory  charge  of  %  of  a  cent  per  bushel. 

The  terminal  charges,  therefore,  necessarily  incurred  in  taking  100,- 
000  bushels  of  grain  from  the  vessel  at  Buffalo  and  putting  it  upon  the 
vessel  at  New  York  are  $2,290,  of  which  Mr.  Depuy  says  $1,010  are  il- 
legal. 

He  further  insisted  that  the  railroad  companies  themselves  owned 
the  elevators  at  Buffalo  and  made  from  their  operation  by  transferring 
canal  grain  at  this  price  a  very  large  sum,  insisting  that  the  actual 
cost  of  elevating  grain  did  not  exceed  1-32  of  a  cent  per  bushel,  and 
that  the  statutory  charge  of  %  of  a  cent  per  bushel  was  21/2  times  what 
the  elevators  had  previously  charged  in  open  competition  before  the 
elevator  trust  at  that  place  was  formed. 

We  should  hardly  base  any  finding  of  fact  upon  this  testimony,  nor 
does  the  subject  seem  to  be  very  material  to  the  disposition  of  this  case. 


NEW  YORK  PRODUCE  EXCHANGE  V.  B.  &  O.  R.  R.,  ET  AL.  205 

We  refer  to  it  as  an  item  of  some  importance  in  determininji;  possibly 
vrhy  the  canal  brings  less  grain  to  New  York  now  than  in  former  years. 
The  average  rate  of  transportation  by  canal  from  Bnft'alo  to  New  York 
in  the  year  1895  was  about  2  cents  a  bushel,  so  that  the  terminal  charges 
upon  100,000  bushels  during  that  season  must  have  considerably  ex- 
ceeded the  total  freight  money. 

It  was  contended  by  the  interveners  that  the  system  of  grain  inspec- 
tion at  New  York  worked  to  the  disadvantage  of  that  port.  It  ap- 
peared that  grain  which  graded  No.  2  at  Chicago  would  take  the  same 
grade  at  Boston,  Philadelphia  or  Baltimore,  while  at  New  York  it 
might  grade  as  "Steamer,"  that  being  the  next  [656]  lower  quality. 
The  principal  difference  between  Steamer  Corn  and  No.  2  seemed  to 
be  that  the  former  was  somewhat  damper  than  the  latter.  The  ele- 
vators at  the  port  of  New  York  in  the  process  of  elevating  subject  the 
corn  to  a  blowing  operation  by  which  it  is  dried,  cooled  and  to  some 
extent  relieved  of  foreign  substances.  It  appeared  to  be  admitted  that 
corn  which  graded  in  as  Steamer  after  being  subjected  to  this  process 
almost  invariably  graded  out  for  export  as  No.  2.  It  did  not  appear 
exactly  what  the  difference  in  price  between  No.  2  and  Steamer  was. 
It  seemed  to  be  generally  understood  that  Steamer  Corn  at  New  York 
was  available  for  export  as  No.  2,  after  being  treated  in  this  manner, 
and  the  price  may  ver}^  likely  have  been  affected  by  that  understand- 
ing. At  times  there  was  a  difference  of  2  or  3  cents  a  bushel.  At 
times  there  was  practically  no  difference,  and  the  rule  seems  to  have 
been  that  the  difference  was  slight — not  usually  exceeding  1  cent  or 
11/^  cents  a  bushel. 

Whether  this  worked  to  the  disadvantage  of  New  York  did  not 
clearly  appear.  It  did  seem  that  it  was  generally  understood  that  the 
inspection  at  New  York  was  more  rigid  upon  inward  grain  than  at 
other  ports,  so  that  the  seller  in  the  West  did  not  always  obtain  at  that 
port  the  grade  to  which  he  conceived  himself  entitled,  and  this  operated 
to  render  New  York  unpopular  as  a  market.  Upon  the  contrary,  if  the 
merchants  at  New  York  can  pay  for  Steamer  Corn  and  export  the  same 
corn  as  No.  2,  that  must  be  a  considerable  advantage  to  them. 

CONCLUSIONS, 

The  questions  presented  by  this  record  upon  the  foregoing  facts  are 
of  very  considerable  importance.  The  differentials  in  case  of  every 
locality  except  Boston  apply  not  merely  upon  freight  intended  for  ex- 
port, but  upon  all  traffic  forwarded  to  these  points.  In  order  to  abolish 
the  differentials  it  would  be  necessary  either  to  raise  the  Baltimore 
and  Philadelphia  rates,  or  to  reduce  the  New  York  rate.     If  the  New 


206  ATLANTIC    PORT   DIFFERENTIALS 

York  rate  were  to  be  reduced  it  would  amount,  upon  all  the  traffic  to 
which  that  differential  applies,  to  the  loss  of  nearly  $1,000,000  per  year. 
If  the  Baltimore  rate  were  to  be  raised  to  the  basis  of  the  New  York 
rate,  that  would  add  about  the  same  amount  to  the  revenues  of  the  lines 
serving  localities  south  of  New  York,  and  in  each  case  this  [657]  would 
mean  an  addition  to  or  a  subtraction  from  the  net  revenues  of  the  com- 
panies. This  is  upon  the  assumption  that  the  volume  of  traffic  con- 
tinues the  same ;  but  the  purpose  of  a  differential  is  to  influence  the 
flow  of  traffic  and  the  abolishing  of  these  might  divert  to  the  New  York 
lines  such  quantities  of  freight  as  to  seriously  deplete  the  revenues  of 
the  southern  lines.  It  is,  therefore,  from  the  standpoint  of  the  car- 
riers, a  most  delicate  matter  to  attempt  to  modify  these  differentials, 
and  this  is  sufficiently  shown  by  the  fierce  contests  which  resulted  in 
the  adoption  of  those  now  in  force. 

Upon  its  part  the  complainant  insists  that  some  relief  of  the  kind 
asked  for  is  of  vital  consequence  to  New  York.  In  3882  something 
more  than  50  per  cent,  of  all  the  wheat,  corn  and  oats  exported  through 
the  Atlantic  and  Gulf  ports  went  out  from  the  port  of  New  York,  while 
in  1896,  this  per  cent,  had  fallen  to  a  little  more  than  25,  and  the  de- 
cline from  1895  to  1896  was  shown  to  be  more  than  three-fourths  of  the 
total  shrinkage.  Now,  the  complainant  says  that  while  New  York  may 
for  a  single  year,  or  for  two  or  three  years,  continue  to  hold  its  import 
trade,  notwithstanding  the  loss  of  its  exports,  eventually  imports  will 
flow  in  through  the  same  ports  from  which  exports  go  out,  and  that  if 
the  larger  part  of  grain  exports  are  diverted  by  these  differentials  from 
New  York,  the  result  will  eventually  be  the  loss  to  that  city  of  a  cor- 
responding amount  of  its  foreign  trade,  so  that  this  condition  of  things 
becomes  a  most  serious  menace  to  the  commerce  of  that  port. 

Philadelphia  and  Baltimore,  upon  the  other  hand,  strenuously  insist 
that  to  abolish  these  differentials  would  take  from  them  the  little  for- 
eign trade  which  they  are  now  enabled  to  obtain. 

It  should  be  noticed  in  the  outset  exactly  what  the  relation  of  the 
Commission  is  to  the  questions  presented.  It  seems  to  have  been  more 
or  less  assumed  upon  the  hearing  and  discussion  of  this  matter  that  the 
Commission  was  vested  with  authority  to  revise  the  action  of  the  de- 
fendants in  the  making  of  these  differentials,  and  that  the  same  con- 
siderations would  address  themselves  to  us  in  passing  upon  their  cor- 
rectness that  the  defendants  ought  to  have  considered  in  putting  them 
in  force.  This  is  entirely  wrong.  Our  function  is  not  that  of  the 
Advisory  Commission  of  1882.  We  are  not  discharging  the  duties  of 
arbitrators  selected  to  determine  [658]  between  the  different  carriers 
upon  the  fairness  of  these  differentials.     Our  only  jurisdiction  is  to 


NEW  YORK  PRODUCE  EXCHANGE  V.  B.  &  O.  R.  R.,  ET  AL.  207 

iiKliiire  whether  the  Act  to  Regulate  Commerce  has  been  violated.  That 
law  does  not  seek  to  infere  with  the  business  operations  of  carriers  sub- 
ject to  its  provisions  until  those  operations  contravene  the  provisions  of 
the  act  itself. 

Take  the  situation  presented  by  this  case.  Here  is  a  vast  amount 
of  freight  to  be  transported  from  the  West  to  the  Atlantic  seaboard, 
and  here  are  these  various  line  of  railway  so  situated  that  they  can  par- 
ticipate in  that  transportation.  Now,  considering  this  as  a  business 
proposition  from  the  standpoint  of  the  carrier,  we  have  nothing  what- 
ever to  do  with  it.  The  railways  may  make  whatever  rates,  form 
whatever  lines,  establish  whatever  differentials,  they  may  deem  best  for 
the  purpose  of  securing  and  conducting  that  transportation.  AA^hether 
in  so  doing  the3^  act  wisely  or  unwisely,  fairly  or  unfairly  between 
themselves,  we  do  not  inquire.  Our  only  inquiry  is,  does  the  situation 
which  the  carriers  have  created  violate  the  Act  to  Regulate  Connnerce. 
That  this  is  the  extent  of  our  authority  is  now  settled  b}^  the  decisions 
of  the  United  States  Supreme  Court.  Interstate  Commerce  Commis- 
sion V.  Baltimore  &  Ohio  R.  Co.,  145  U.  S.  263,  36  L.  ed.  699,  4  Inters. 
Com.  Rep.  92;  Texas  ct-  P.  R.  Co.  v.  Interstate  Commerce  Commission, 
162  U.  S.  197,  40  L.  ed.  940,  5  Inters.  Com.  Rep.  405;  Interstate  Com- 
merce Commission  v.  Cincinnati,  N.  0.  &  T.  P.  R.  Co.,  167  U.  S.  479, 
42  L.  ed.  243 ;  Interstate  Commerce  Commission  v.  Alabama  Midland 
R.  Co.,  168  U.  S.  144,  42  L.  ed.  414. 

The  question  before  us  for  consideration  is,  therefore,  whether  these 
differentials  are  in  violation  of  the  Interstate  Commerce  Act.  The 
complainant  alleges  that  they  are  in  contravention  of  the  third  section 
of  that  act,  for  the  reason  that  they  discriminate  against  the  locality 
of  NcAV  York  and  in  favor  of  the  localities  of  Baltimore  and  Philadel- 
phia. It  should  be  noticed  in  this  connection,  upon  the  authority  of  the 
cases  above  cited,  that  it  is  not  sufficient  to  show  the  fact  of  such  a 
discrimination.  Railway  companies  are  not  prohibited  by  the  third 
section  from  preferring  one  locality  to  another  unless  that  preference 
amounts  to  an  undue  or  unreasonable  one.  This  phase  of  the  law  does 
not  seem  to  have  been  nmch  dwelt  upon  in  the  argument,  but  it  [659] 
is  important  that  it  should  be  fully  appreciated.  It  is  insisted  that 
these  differentials  give  an  undue  preference  for  the  reason  that  they 
are  without  excuse  or  justification.  If  the  assumption  of  fact  em- 
braced in  this  statement  is  true,  the  conclusion  probably  follows.  A 
preference  without  legitimate  excuse  would  be  in  and  of  itself  an  undue 
and  unreasonable  one.  It  is  therefore  proper  to  consider  at  the  very 
outset  upon  what  alleged  pretext  the  defendants  have  instituted  these 
differentials. 


208  ATLANTIC    PORT   DIFFERENTIALS 

A  good  deal  has  been  said  in  various  parts  of  the  case  about  differ- 
ences in  distance  and  differences  in  cost  of  service,  and  these  alleged 
advantages  in  favor  of  Baltimore  and  Philadelphia  have  been  earnestly 
relied  upon  by  the  representatives  of  those  localities  in  justification 
of  the  preference  which  they  receive.  An  examination  of  the  whole 
ease  plainly  shows,  however,  that  while  these  elements  may  have  to 
some  extent  entered  into  the  determination  of  the  question  by  the  de- 
fendant carriers,  the  controlling  purpose  of  the  differentials  is  to  dis- 
tribute between  rival  railway  lines  the  export  traffic  which  moves  from 
the  West  to  the  Atlantic  seaboard.  Very  large  quantities  of  grain  and 
provisions  are  exported  from  the  United  States  to  foreign  countries. 
This  traffic  originates  in  the  West  and  the  defendant  lines  are  so  situ- 
ated that  they  can  carry  it  to  the  ports  of  export.  If  it  passes  over 
one  line  it  is  exported  through  the  port  of  New  York ;  if  it  passes  over 
another  line  it  is  exported  through  the  port  of  Baltimore.  Now,  the 
primary  purpose  of  these  differentials  is,  not  to  do  justice  to  a  par- 
ticular port,  nor  to  recognize  the  advantages  of  a  particular  port,  but 
to  enable  the  various  competing  lines  to  obtain  a  fair  proportion  of  this 
traffic.  In  other  words,  the  reason  for  these  differentials  is  competi- 
tion between  railways.  Cost  of  service  and  distance  are  very  likely 
taken  into  account  by  the  defendants  in  determining  whether  under 
the  operation  of  the  differentials  a  particular  line  has  obtained  more 
than  its  share  of  the  traffic,  but  the  underlying  principle  is  competition. 
Upon  no  other  theory  could  Boston,  which  is  88  miles  farther  from 
Chicago  than  New  York,  be  given  the  same  rate  with  New  York,  while 
Norfolk,  which  is  72  miles  farther  from  Chicago  than  New  York,  has 
a  rate  of  3  cents  per  hundred  pounds  less. 

Do  these  competitive  conditions  justifj'  the  preference  of  one  locality 
to  another?  It  is  clear  under  the  recent  decisions  of  the  [660]  United 
States  Supreme  Court,  not  that  they  necessarily  do,  but  that  they  may. 
It  was  held  in  the  Import  Rate  Case,  Interstate  Commeree  Commission 
V.  Texas  &  P.  R.  Co.,  162  U.  S.  197,  40  L.  ed.  940,  5  Inters.  Com.  Rep. 
405,  that  competition  might  justify  a  railway  line  between  New  Orleans 
and  San  Francisco  in  carrying  merchandise  as  a  part  of  a  through 
shipment  from  Liverpool  to  San  Francisco  at  a  rate  which  yielded  to 
that  company  for  its  division  less  than  one-third  of  what  it  received 
for  carrying  the  same  kind  of  merchandise  from  New  Orleans  to  San 
Francisco.  In  the  Troy  Case,  Interstate  Commerce  Commission  v. 
Alahama  Midland  R.  Co.,  168  U.  S.  144,  42  L.  ed.  414,  it  was  deter- 
mined that  railway  competition  did  justifj^  the  defendant  in  making  a 
lower  rate  to  a  more  distant  point.  Railway  competition  may,  there- 
fore, excuse  the  giving  of  a  preference  to  a  particular  locality  or  a  par- 


NEW  YORK  PRODUCE  EXCHANGE  V.  B.  &  O.  R.  R.,  ET  AL.  209 

ticular  commodity,  i)rovi(led  the  interests  of  the  public  are  not  unduly 
sacrificed  to  those  of  the  carrier. 

In  the  light  of  these  cases  it  is  difficult  to  see  why  it  is  not  perfectly 
legitimate  for  carriers  to  make  differentials  like  those  in  question. 
The  Baltimore  &  Ohio  Railroad  extends  from  Chicago  to  Baltimore. 
It  comes  into  competition  with  the  lines  running  to  New  York  for  this 
export  grain  traffic.  There  are  many  kinds  of  traffic  in  which  other 
facilities,  like  expedition,  are  of  more  importance  than  the  mere  ques- 
tion of  rates,  but  in  the  case  of  this  traffic  where  a  change  of  Ys  cent 
a  bushel  in  the  cost  determines  through  which  port  it  shall  be  exported, 
the  rate  is  practically  the  only  medium  of  competition,  and  the  only 
way  by  which  the  Baltimore  &  Ohio  Company  can  secure  a  share  of  this 
traffic  is  by  making  a  rate  in  competition  with  the  rate  to  New  York 
which  will  secure  it.  If  a  lower  rate  is  necessary  it  may  make  that 
lower  rate,  and  it  might  make  it  even  though  the  distance  from  Chicago 
to  Baltimore  was  greater  than  the  distance  from  Chicago  to  New  York, 
and  even  though  the  cost  of  transporting  that  grain  to  Baltimore  was 
greater  than  the  cost  of  transporting  it  to  New  York. 

We  think,  therefore,  that  the  prijiciple,  upon  which  these  differentials 
are  made  is  legitimate,  but  it  does  not  by  any  means  follow  that  the 
differentials  themselves  are  legitimate.  A  given  preference  may  be 
justitiable  under  some  circumstances,  and  not  under  others;  to  some 
extent,  and  not  to  a  greater  extent.  Grant[661]ing  that  a  discrimina- 
tion against  a  locality  is  excusable  in  theory,  the  question  still  remains 
whether  under  the  third  section  it  is  undue  or  unreasonable,  and  that 
question  is  one  of  fact  in  each  individual  case.  Upon  the  whole  situ- 
ation, is  the  preference  justifiable?  This  seems  to  be  the  rule  of  the 
cases  above  referred  to. 

Evidently  in  applying  this  rule  to  a  particular  case  the  just  interest 
of  the  carrier  should  be  considered.  Carriers  are  allowed  to  prefer  one 
locality  to  another  under  stress  of  competition  in  some  instances,  for 
the  reason  that  the  interest  of  the  carrier  requires  it ;  but  every  prefer- 
ence is  to  a  degree  a  hardship  upon  the  community  against  which  it  is 
enforced,  and  that  hardship  should  be,  in  a  way,  set  over  against  the 
interest  of  the  carrier.  In  this  connection,  what  the  Supreme  Court 
of  the  United  States,  in  United  States  v.  Trans-Missouri  Freight  Assa., 
166  U.  S.  290,  41  L.  ed.  1007,  said  of  the  relation  of  the  railways  to  the 
public,  "that  they  all  primarily  owe  duties  to  the  public  of  a  higher 
nature  even  than  that  of  earning  large  dividends  for  their  share- 
holders," must  be  borne  in  mind.  Still  it  is  plain  that  the  interest  of 
the  carrier  is  an  important  factor  to  be  considered,  and  that  in  order 


14 


210  ATLANTIC   PORT   DIFFERENTIALS 

to  justly  estimate  a  given  case  it  is  necessary  to  know  how  the  carrier 
as  well  as  the  public  stands  affected  by  the  preference. 

In  this  case  we  have  no  information  from  the  carriers'  standpoint. 
The  defendants  appeared  at  the  opening  hearing,  but  gradually  with- 
drew from  participation  in  the  proceedings  until  finally  the  contest  be- 
came one  between  the  three  ports,  New  York,  Philadelphia  and  Balti- 
more. We  onlj^  know  that  the  defendants  have  established  and  are 
maintaining  these  differentials,  and  we  assume  that  tliey  are  satisfactory 
to  them,  and  that  any  disturbance  of  them  would  be  against  their  wish 
and  against  their  interest.  This  is,  perhaps,  equivalent  to  saying  that 
the  complainant  assumes  the  burden  of  establishing  the  fact  that  there 
is  an  undue  preference. 

The  complainant  alleges  tbat  an  examination  of  the  basis  upon  which 
these  differentials  are  constructed  and  the  history  of  the  differentials 
themselves  show  them  to  be  manifestly  unfair  to  the  port  of  New  York 
for  the  reason,  first,  that  the  pretended  difference  in  cost  of  ocean 
freights  from  the  various  ports  does  [662]  not  exist,  and,  secondly, 
that,  asuming  the  differentials  to  have  been  fair  when  they  Avere  first 
agreed  upon  in  1877,  the  changed  conditions  render  them  gros.sly  un- 
fair at  the  present  time.    We  will  examine  briefly  these  claims. 

The  rates  complained  of  are  at  the  present  time  recognized  and  main- 
tained by  most  of  the  defendants  through  the  medium  of  the  Joint 
Traffic  Association.  Mr.  George  R.  Blanchard,  the  commissioner  of 
that  association,  stated  in  his  testimony  before  the  commission  the 
theory  upon  which  these  differentials  were  fixed.  As  we  understand 
bis  testimony  upon  that  point,  it  was  this:  A  considerable  part  of  the 
grain  in  question  is  actualh^  shipped  from  the  city  of  Chicago.  Al- 
most all  of  it  is  purchased  upon  the  basis  of  the  Chicago  market  price. 
Chicago  may  therefore  be  treated  as  the  point  of  origin.  The  largest 
foreign  market  is  Liverpool,  and  that,  for  the  purpose  of  illustration, 
may  be  treated  as  the  point  of  destination.  Now,  the  object  of  these 
differentials  is  to  make  the  cost  transporting  this  grain  from  Chicago 
to  Liverpool  the  same  through  all  these  ports.  Perhaps,  more  accu- 
rately speaking,  Mr.  Blanchard  testified  that  the  purpose  of  the  differ- 
ential was  to  equalize  the  advantages  of  transportation  through  these 
several  ports,  but  inasmuch  as  in  the  exportation  of  grain,  cost  is  the 
principal  element,  it  comes  to  substantially  the  same  thing. 

Now,  if  the  purpose  of  the  differential  is  to  make  the  cost  of  exporting 
through  the  different  ports  the  same,  it  is  evident  that  in  case  the  cost 
of  carriage  from  the  various  domestic  ports  to  the  foreign  ports  is  the 
same,  then  the  cost  of  placing  the  grain  on  shipboard  at  the  domestic 
ports  should  also  be  the  same,  but  that  any  difference  in  the  expense  of 


NEW  YORK  PRODUCE  EXCHANGE  V.  H.  &  O.  R.  R.,  ET  AT..  211 

ocean  carriage  should  be  equalized  by  a  c()rfespondin>i'  (lirt'ci'cnce  in  the 
cost  of  inland  carriage.  Assuming  that  the  cost  of  ocean  carriage  from 
Baltimore  to  Liverpool  is  3  cents  per  liundred  more  than  from  New 
York,  then  the  inland  rail  rate  from  CyJiicago  to  Baltimore  must  be  3 
cents  per  hundred  less,  so  that  the  total  rate  may  be  the  same.  This 
Mr.  Blanchard  says,  is  the  theory  upon  which  the  differentials  are  de- 
termined. There  are  certain  minor  considerations,  but,  broadly  speak- 
ing, the  differential  is  supposed  to  correspond  with  and  make  good  a 
difference  in  the  ocean  freight  rate.  In  order  to  determine  whether 
the  present  differentials  are  consistent  [663]  with  that  theory  it  is  only 
necessary  to  inquire  whether  the  existing  difference  in  ocean  rates  cor- 
responds to  the  established  differential. 

It  will  be  seen  by  referring  to  the  findings  of  fact  tliat  grain  is  car- 
ried either  in  full  cargo  shipments  or  at  berth  rates.  It  will  be  further 
seen  that  the  full  cargo  rate  is  the  same  from  each  one  of  these  three 
ports.  There  are  certain  minor  differences  in  favor  of  New  York  and 
certain  minor  differences  in  favor  of  Baltimore  and  Philadelphia;  Imt 
taken  altogether,  we  are  satisfied  that  i)ractically  there  is  no  difference 
in  the  expense  of  the  ocean  carriage  of  grain  in  full  cargo  lots  from 
New  York,  Philadelphia  and  Baltimore. 

With  berth  rate  business  this  is  different,  and  New  York  enjoys  very 
important  advantages  over  either  Baltimore  or  Philadelphia.  In  the 
first  place  the  lines  of  steamship  from  that  port  reach  more  grain 
markets  than  can  be  reached  from  either  Baltimore  or  Philadelphia. 
Then,  the  lines  to  all  the  principal  grain  markets  are  much  more  numer- 
ous and  the  sailings  very  much  more  frequent.  All  this  gives  the  port 
of  New  York,  in  berth  rate  business  of  all  kinds,  a  great  advantage  over 
either  of  her  competitors  in  this  proceeding,  and  we  have  found  that 
this  difference  amounts  to  about  2  cents  per  hundred  pounds  as  to  both 
Baltimore  and  Philadelphia.  From  this  alone  it  would  follow — assum- 
ing this  to  be  the  only  question  involved  in  the  establishment  of  the 
differential- — that  there  ought  to  be  no  differential  upon  full  cargo 
business,  and  that  the  present  differential  is  substantially  right  as  to 
berth  rate  business.  But  there  is  no  way  in  which  full  cargo  grain  can 
be  distinguished  in  the  matter  of  the  freight  rate  from  berth  rate  grain, 
and  it  is  necessary  to  find  some  figure  which  will  properly  adjust  the 
two.  The  articles  involved  in  this  proceeding  are  provisions,  grain 
and  flour.  Provisions  and  flour  are  entirely  shipped  upon  the  bertii 
rate.  Wheat,  except  in  exceptional  cases,  is  exported  by  l)erth  rate. 
Corn  more  frequently  goes  by  full  cargo  shipments.  An  idea  of  the 
relative  amount  of  grain  shipped  by  berth  rate  and  full  cargo  can  be 
obtained  from  tables  4  and  5. 


212  ATLANTIC    PORT   DIFFERENTIALS 

The  berth  rate  is  very  much  less  stable  than  the  full  cargo  rate  and, 
as  a  rule,  lower  than  the  full  cargo  rate.  As  a  result,  little  or  no  full 
cargo  business  can  be  done  until  the  berth  space  has  been  [664]  ex- 
hausted. As  was  well  said  by  counsel  for  one  of  the  interveners,  a  full 
cargo  business  is  only  possible  when  the  berth  business  has  come  to  the 
point  of  saturation.  It  follows,  therefore,  that  in  years  when  grain 
exports  are  light  the  full  cargo  business  is  small,  while  in  years  Miien 
exports  are  heavy  that  business  is  larger ;  and  from  this  it  further  fol- 
lows, inasmuch  as  the  full  cargo  business  can  be  done  more  advantag- 
eously at  Baltimore  and  Philadelphia  than  at  New  York,  that  in  years  of 
large  grain  exports  Philadelphia  and  Baltimore  ouglit  to  obtain  much 
more  of  this  export  traffic  than  they  do  in  years  when  the  total  amount 
of  exports  is  small.  This  rule  is  not  an  invariable  one,  however,  since 
other  traffic  conditions  may  make  the  supply  of  berth  space  larger  in 
years  of  large  exports  than  in  years  of  small  exports. 

It  should  be  observed  further  that  any  finding  of  fact  as  to  the  rela- 
tive berth  rates  from  these  three  ports  for  any  one  year  or  for  any 
succession  of  years,  especially  for  a  series  of  years  in  the  past,  must 
be  extremely  unsatisfactory.  The  rate  which  is  quoted  and  the  rate 
paid  for  actual  engagements  are  not  by  any  means  the  same,  so  that 
it  cannot  be  stated  within  the  limits  of  perhaps  a  cent  per  hundred 
what  the  relative  berth  rates  from  New  York,  Philadelphia  and  Balti- 
more are. 

It  will  be  seen,  therefore,  that  any  attempt  to  determine  exactly  the 
relative  cost  of  ocean  carriage  from  New  York,  Philadelphia  and  Balti- 
more of  the  commodities  embraced  in  this  proceeding  is,  for  the  reasons 
above  stated  impossible.  It  is  possible  to  give  the  relative  cost  in  the 
case  of  full  cargo  shipments.  It  is  possible  to  give,  within  reasonable 
limits,  the  relative  berth  rates;  but  to  combine  the  two  and  to  say 
what  will  for  a  series  of  years  be  the  difference  in  the  cost  of  carrying 
flour,  grain  and  provisions,  and  to  make  that  the  basis  of  a  differential 
which  will  be  strictly  fair,  is  out  of  the  question. 

Assuming  that  the  differential  is  intended  solely  to  equalize  the  dif- 
ference in  ocean  rates,  we  should  be  of  the  impression  that  there  is  no 
ground  for  a  different  differential  at  Baltimore  than  at  Philadelphia, 
for  we  do  not  find  that  the  cost  of  ocean  carriage  from  those  ports 
differs  materially,  and  we  should  be  of  the  further  impression  that  the 
present  Philadelphia  differential  just  about  equaled  the  difference  in 
berth  rates  and  M'ould  be  some[665]what  too  high  as  applied  to  both 
berth  and  cargo  business.  It  should  be  observed,  however,  that  New 
York  enjoys  certain  advantages  in  reference  to  its  berth  business  in 
addition  to  the  mere  difference  in  rate.    Many  ports  can  be  reached  in 


NEW  YORK  PRODUCE  EXCHANGE  V.  B.  &  O.  R.  R.,  ET  AL.  213 

this  waj^  from  New  York  which  are  not  accessible  at  all  from  the  out- 
ports.  The  sailings  from  New  York  are  much  more  frequent  than  from 
the  outports,  so  that  it  is  possible  to  deliver  small  quantities  of  grain 
more  frequently  from  that  port  than  from  the  outports  and  to  sell  in 
many  localities  which  cannot  be  reached  from  the  outports  at  all.  Just 
what  the  measure  of  advantage  to  New  York  in  the  fraction  of  a  cent 
per  hundred  pounds  on  all  the  grain  exported  is,  cannot  be  even  intelli- 
gently' surmised. 

Taking  this  whole  situation  together,  we  do  not  think  it  could  be 
fairly  determined  in  advance  what  differential  would  be  required  to 
offset  the  advantages  of  New  York  over  its  rivals  in  the  matter  of  ocean 
facilities.  About  all  that  can  be  done  is  to  determine  within  probable 
limits  what  that  differential  should  be  and  then  decide  from  an  observ- 
ance of  the  actual  operation  of  the  differential  whether  its  eff'ect  is  a  fair 
one. 

These  differentials  were  established  in  1877,  and  re-established,  and 
approved  by  the  Advisory  Commission,  in  1882.  The  complainants 
insist  that  assuming  them  to  have  been  perfectly  fair  upon  either  of  the 
above  mentioned  dates,  they  have,  owing  to  changed  conditions,  be- 
come grossly  unfair  at  the  present  time. 

Since  the  differentials  are  arbitrary,  the  rates  differ  b}'  so  many 
cents  no  matter  what  the  New  York  rate  may  be.  An  examination  of 
table  No.  22  shows  that  in  1878,  that  being  the  year  after  the  present 
differentials  were  fixed  upon,  the  rate  on  corn  from  Chicago  to  New 
York  was  about  30  cents  per  hundred  pounds.  This  would  make  the 
Baltimore  rate  27  cents,  or  90  per  cent,  of  the  New  York  rate.  In  1882 
the  New  York  rate  had  fallen  to  23  cents ;  and  the  Baltimore  rate 
would  be  20  cents,  or  about  87  per  cent,  of  the  New  York  rate.  In  1896 
the  New  York  rate  was  18.5,  and  the  Baltimore  rate  15.5,  or  84  per  cent, 
of  the  New  York  rate.  In  other  words,  the  gradual  lowering  of  rates 
since  these  differentials  were  established  has  operated  to  make  the 
Baltimore  and  Philadelphia  rates  relatively  less  in  comparison  with  the 
New  York  rate  than  they  were  in  1878  or  1882.  If  the  purpose  be  to 
establish  a  fixed  relation  between  these  rates  and  that  relation  was  cor- 
rect then,  it  is  wrong  now. 

[666]  So,  too,  in  the  matter  of  ocean  rates.  It  seems  to  be  pretty 
well  established  that  the  agreement  of  April  5,  1877,  fixed  the  differen- 
tials at  the  present  figure  for  the  purpose  of  equalizing  the  difference  in 
the  cost  of  ocean  transportation.  The  Advisory  Commission  in  1882 
found  a  difference  in  the  cost  of  such  transportation  which  approxi- 
mately equaled  the  amount  of  the  differentials.  The  testimony  before 
us  shows  that  this  difference  in  the  cost  of  ocean  transportation  has  been 


21-1  ATLANTIC    PORT    DIFFERENTIALS 

gradually  growing  less  since  1882.  "While  no  change  has  taken  place  in 
reference  to  full  cargo  shipments,  the  difference  in  berth  rates  in  favor 
of  New  York  is  less  now  than  it  was  then,  so  that  if  the  differential  is 
to  be  determined  upon  that  basis  it  would  seem  that,  if  right  then,  it  is 
wrong  now. 

Again,  a  given  differential  has  more  effect  now  than  when  these  were 
fixed.  The  price  of  grain  in  1882  was  more  than  in  1896.  Corn  sold  in 
1882  upon  the  Chicago  market  for  about  62  cents  as  against  25  cents 
in  1896.  It  appeared  in  testimony  that  at  the  present  time  a  difference 
in  the  total  expense  of  exporting  corn  of  i/s  cent  a  bushel  was  sufficient 
to  divert  it  from  one  port  to  the  other,  but  it  was  said  that  in  1882  this 
would  not  have  been  so,  since  competition  in  this  business  had  increased 
and  the  margin  upon  which  the  business  was  done  had  grown  smaller 
so  that  %  cent  a  bushel  had  become  a  more  important  factor. 

We  think  this  contention  of  the  complainant  is  well  taken.  The 
gradual  lowering  of  rates,  the  shrinking  of  values,  the  increase  of  com- 
petition, have  all  operated  to  make  the  differentials  in  favor  of  Balti- 
more and  Philadelphia  mean  more  to-day  than  they  did  when  agreed 
upon.  A  difference  of  3  cents  per  hundred  pounds  was  more  effective 
in  drawing  export  grain  traffic  through  Baltimore  in  1896  than  in 
1882.  Just  how  far  this  makes  out  that  the  present  dift'erential  is  un- 
duly preferential  against  New  York  will  be  considered  farther  on. 

The  interveners  earnestly  insist  that  the  preference  granted  to  Balti- 
more and  Philadelphia  is  justified  by  the  fact  that  those  localities  are 
nearer  the  point  from  which  this  traffic  originates,  and  that  the  ex- 
pense of  rendering  the  service  covered  by  the  transportation  rate  to 
Philadelphia  and  Baltimore  is  less  than  at  New  York.  For  the  purpose 
of  determining  to  what  benefit,  if  any,  [667]  these  localities  are  entitled 
upon  the  score  of  distance,  the  short  line  to  each  port  must  be  con- 
sidered. 

In  this  case  the  short  line  from  Chicago  to  New  York,  Philadelphia 
and  Baltimore  is  in  all  eases  by  the  Penns^dvania  Railroad,  and  is  912 
miles  to  New  York,  822  miles  to  Philadelphia  and  802  miles  to  Balti- 
more. The  distance  from  Chicago  to  Baltimore  is  88  per  cent,  of  the 
distance  to  New  York,  and  that,  when  these  differentials  were  first 
adopted  in  1877,  was  almost  exactly  the  percentage  which  the  Baltimore 
rate  was  of  the  New  York  rate.  At  the  present  time  the  Baltimore 
rate  on  corn  is  about  84  per  cent,  of  the  New  York  rate. 

The  complainant  says  that  distance  should  not  be  considered  as  a 
justification  for  these  differentials  because  it  is  habitually  disregarded 
by  the  defendants  and  it  instances  the  rates  which  are  made  by  the 
defendants    in    this    very    case.      Thus,    the    distance    to    Boston    is 


NEW  YORK  PRODUCE  EXCHANGE  V.  B.  &  O.  R.  R.,  ET  AL.  215 

1 ,000  miles  while  the  rate  for  export  is  the  same  as  that  to  New  York. 
Newport  News  is  y-t  miles  farther  from  Chicago  than  is  Baltimore,  but 
it  takes  the  Baltimore  rate.  Norfolk,  Va.,  is  72  miles  farther  from 
Chicago  than  is  New  York,  but  it  takes  a  rate  3  cents  lower  than  New 
York.  Now,  the  complainant  says,  since  these  defendants  have  dis- 
regarded the  element  of  distance  in  the  making  of  these  very  rates 
complained  of  they  cannot  be  allowed  to  set  it  up  as  a  justification  in 
the  case  of  a  particular  one  of  these  rates. 

Distance  is  frequently  disregarded  by  carriers  in  the  making  of  their 
rates.  The  Commission  has  held  that  it  may  be  under  some  circum- 
stances properly  disregarded  to  some  extent.  It  has  been  repeatedly 
said,  however,  that  distance  ought,  when  possible,  to  be  regarded,  and 
we  have  never  held  that  a  carrier  would  be  compelled  to  disregard  it 
for  the  purpose  of  putting  two  communities  upon  a  commercial  equal- 
ity. 

Commercial  Cluh  of  Omaha  v.  CJiicago,  B.  I.  t£-  P.  R.  Co.,  6  Inters. 
Com.  Rep.  647 ;  Freight  Bureau  of  Cincinnati  Chamher  of  Commerce 
V.  Cincinnati  N.  0.  &  T.  P.  R.  Co.,  7  Inters.  Com.  Rep.  180. 

It  must  be  remembered  that  carriers  are  allowed  a  certain  latitude 
in  this  respect.  They  may  within  certain  limits  regard  or  disregard 
distance,  as  their  interest  demands.  If  the  Pennsylvania  Railroad 
Company,  by  reason  of  competitive  conditions  saw  [668]  fit  to  make 
the  same  rate  to  New  York  and  Philadelphia,  it  is  possible  that  Phila- 
delphia could  not  insist  that  such  a  disregard  of  distance  w^as  unduly 
preferential,  but  it  is  clear  to  us  that  if  the  Pennsylvania  Company 
elects  to  make  a  lower  rate  from  Chicago  to  Philadelphia  than  to  New 
York,  it  may  show  in  justification  of  that  rate  that  traffic  for  New 
York  must  be  hauled  through  and  90  miles  beyond  Philadelphia.  We 
also  think  that  when  New  York  asserts  that  the  ditt'erential  in  favor  of 
Philadelphia  unduly  prefers  that  locality,  Philadelphia  may  reply  that 
its  advantage  of  distance  entitles  it  to  a  lower  rate. 

Distance  is  recognized  as  an  element  in  determining  the  amount  of 
a  rate  upon  the  assumption  that  it  corresponds  in  a  degree  with  the 
cost  of  service.  It  does  not,  however,  necessarily  follow  that  the  greater 
cost  of  service  necessarily  goes  with  the  greater  distance.  It  is  certain 
that  the  expense  of  transporting  grain  from  Chicago  to  New  York  by 
the  Pennsylvania  lines  is  more  than  from  Chicago  to  Philadelphia,  for, 
by  those  lines,  the  transportation  is  through  Philadelphia;  but  it  is 
quite  possible  that  it  might  cost  less  to  transport  grain  from  Chicago  to 
New  York  via  the  New  York  Central  than  to  Philadelphia,  even,  by 
the  Pennsylvania.  Nothing  of  that  has  been  gone  into  in  this  case,  and 
we  are  left  to  assume  that  the  cost  of  transportation  is  measured  by 


216  ATLANTIC    PORT    DIFFERENTIALS 

the  distance,  for  as  a  general  rule,  in  the  absence  of  exceptional  con- 
ditions, the  greater  the  distance  the  greater  that  cost. 

One  subject  has,  however,  been  considerably  discussed  both  in  the 
testimony  and  in  the  argument  which  bears  upon  the  cost  of  service, 
and  that  is  the  terminal  charges  and  service  at  the  various  ports.  It 
will  be  seen  by  referring  to  the  findings  of  fact  that  the  carrier  at 
Baltimore  or  Philadelphia  ordinarily  receives  V/i  cents  per  bushel  in 
addition  to  the  rate  for  performing  a  somewhat  less  service  than  is 
performed  at  New  York  for  the  rate.  The  carrier  to  New  York  for 
putting  the  grain  upon  a  barge  and  towing  it  to  the  side  of  the  vessel 
receives  the  rate,  whatever  it  may  be,  while  the  carrier  to  Baltimore  or 
Philadelphia  for  a  service  equivalent  to  putting  the  grain  upon  the 
barge,  without  the  added  expense  of  lighterage,  receives  the  rate  and 
in  addition  1^  cents  per  bushel.  This  li/4  cents  amounts  to  more  than 
the  differential  at  Philadelphia,  and,  if  the  cost  of  lighterage  be  [669] 
added,  to  nearly  the  differential  at  Baltimore.  Apparentl}^  this  has  the 
same  bearing  upon  the  questions  involved  as  has  the  element  of  dis- 
tance. 

The  defendants  do  not  justify  these  differentials  upon  the  ground 
either  of  distance  or  cost  of  service.  We  do  not  express  an  opinion 
that  they  could  be  justified  to  their  full  extent  upon  either  of  these 
grounds.  They  certainly  could  not  in  the  case  of  Norfolk  and  New- 
port News.  But  we  do  think  that  in  this  inquiry  between  the  three 
localities.  New  York,  Philadelphia  and  Baltimore,  in  determining 
whether  there  is  an  undue  preference,  the  advantage  which  Philadel- 
phia and  Baltimore  possess  in  the  way  of  distance  should  be  considered, 
and  that  the  same  is  true  of  the  additional  expense  of  delivery  at  New 
York. 

The  Advisory  Commission  of  1882  was  apparently  of  the  opinion 
that  the  most  satisfactory  test  of  these  differentials  was  the  result  of 
their  operation.  Such  must  be  the  opinion  of  anyone  who  gives  the 
matter  careful  attention.  The  problem  is  so  complex,  the  factors 
which  enter  into  it  are  so  numerous  and  so  impossible  of  exact  esti- 
mation, that  it  is  difficult  of  solution  by  any  a  priori  process.  Actual 
observation  of  the  effect  of  these  preferences  is  the  best  if  not  the  only 
means  of  determining  their  fairness  or  unfairness.  Complainant  un- 
hesitatingly accepts  this  test  and  asserts  that  from  this  phase  of  the 
case  more  plainly  than  anywhere  else  does  the  justice  of  its  contention 
appear.  Indeed  it  was  the  very  marked  falling  off  in  exportations  of 
grain  through  the  port  of  New  York  which  alarmed  the  complainant 
and  led  to  the  prosecution  of  this  proceeding.  It  is  to  this  aspect  of 
the  case  that  the  testimony  has  been  largely  addressed  upon  both  sides. 


NEW  YORK  PRODUCE  EXCHANGE  V.  B.  &  0.  R.  R.,  ET  AL.  217 

In  1882,  about  65  per  cent,  of  all  the  exports  from  the  United  States 
exported  through  the  Atlantic  and  Gulf  ports  passed  through  the  port 
of  New  York.  The  same  year  80  per  cent,  of  all  tlie  imports  into  the 
United  States  by  way  of  these  same  ports  came  in  at  the  port  of  New 
York.  It  will  be  seen,  therefore,  that  during  that  .year,  being  the  year 
when  the  Advisory  Commission  pronounced  upon  the  reasonableness 
of  these  differentials,  New  York  practically  engrossed  the  foreign  trade 
of  this  country.  A  preliminary  question  is  how  far  is  the  port  of 
New  York  "entitled,"  or  how  far  can  that  port  expect  to  continue,  to 
enjoy  that  commercial  supremacy. 

[670]  Plainly  not  to  the  same  extent.  It  would  be  in  accordance 
neither  with  the  theory  of  our  institutions  nor  with  the  history  of  the 
development  of  our  nation  to  permit  any  one  port  upon  our  vast  ex- 
tent of  seacoast  to  monopolize  the  trade  with  foreign  nations. 

Within  recent  years  the  United  States  government  has  expended  in 
improving  navigation  to  and  at  the  port  of  Philadelphia  about  $9,- 
500,000;  at  Baltimore  $3,600,000;  at  Galveston  $8,500,000;  and  at 
New  Orleans,  or  upon  the  Mississippi  River,  of  which  New  Orleans 
takes  the  benefit,  about  $8,000,000.  These  vast  sums  have  not  been 
appropriated  and  expended  certainly  upon  the  theory  that  it  was 
desirable  for  the  foreign  trade  of  this  country  to  tlow  through  the  port 
of  New  York  alone.  Rather  does  this  recognize  it  as  the  policy  of  our 
government  that  its  foreign  commerce  should  be  distributed  between 
various  ports. 

Such  is  also  the  inevitable  tendency  of  the  developmeut  of  our  coun- 
try. Hitherto  that  development  has  gone  on  in  such  a  way  that  New 
York  has  been  enabled  to  seize  more  of  our  export  and  import  trade 
than  would  naturally  belong  to  it.  The  lines  of  transportation  leading 
to  New  York  and  the  pecuniary  interests  concentrated  at  that  point 
have  been  so  strong  as  to  divert  both  export  and  import  traffic  to  that 
port  which  might  naturally  go  to  some  other  port.  These  same  in- 
fluences will  unquestionably  continue  to  have  the  same  effect  in  the 
future,  but  not  to  the  same  extent.  Other  strong  influences  are  begin- 
ning to  operate  in  favor  of  other  ports. 

The  distance  from  Chicago  to  New  York  is  about  the  same  as  to 
New  Orleans,  and  the  water  communication  between  Chicago  and  New 
York  will,  during  certain  seasons  of  the  year  at  least,  give  New  York 
an  advantage  as  to  traffic  which  fairly  originates  at  Chicago.  But  a 
glance  at  the  map  of  the  United  States  shows  that  the  grain-producing 
territory,  much  of  it,  lies  between  New  Orleans  upon  the  south  and 
Chicago  upon  the  north,  and  is  most  of  it  nearer  New  Orleans  than 
New  York.    When  this  export  corn  moves  to  Chicago  it  moves  away 


218  ATI^ ANTIC    PORT   DIFFERENTIALS 

from  New  Orleans,  or  at  least  not  towards  it ;  and  the  same  thing  is 
true  of  much  of  the  export  wheat.  The  distance  from  Kansas  City  and 
St.  Louis  to  New  Orleans  is  less  than  two-thirds  that  to  New  York. 
The  Mississippi  River  and  its  tributaries  give  access  to  all  this  region. 

[671]  A  year  ago  the  Commission  inspected  the  terminal  and  har- 
bor facilities  at  New  Orleans.  Its  docks  are  alread.y  extensive  and  are 
capable  of  almost  unlimited  extension.  There  is  no  place  in  the  United 
States,  with  possibly  one  exception,  where  grain  can  be  transferred 
from  the  car  to  the  vessel  more  cheaply  than  here.  The  grade  from  the 
grain  fields  to  these  elevators  is  an  easy  one.  The  corporations  whicli 
operate  the  lines  of  railway  leading  to  them  are  strong  and  aggressive. 
They  will  undoubtedly  demand  a  larger  portion  of  that  traffic  which  is 
tributary  to  them,  and  will  gradually  acquire  more  and  more  of  it, 
and  this  in  its  turn  will  bring  to  New  Orleans  a  certain  amount  of 
those  importations  which  now  reach  New  York.  The  same  thing  is  and 
will  be  true  of  Galveston  and  other  ports.  New  York  cannot  expect, 
therefore,  to  occupy  the  same  relative  position  of  supremacy  with  ref- 
erence to  our  foreign  commerce  in  the  future  that  it  has  in  the  past. 

This  is  indicated  b3'  actual  results  up  to  the  present  time.  In  1882, 
of  all  wheat,  corn  and  oats  exported  through  Atlantic  or  Gulf  ports, 
51.1  per  cent  passed  through  New  York  and  5.8  per  cent  through  the 
ports  of  New  Orleans,  Norfolk,  Newport  News  and  Galveston ;  while 
in  1896,  26.9  per  cent,  passed  through  New  York,  and  31.3  per  cent, 
through  the  four  ports  above  named.  From  one-half  the  whole,  New 
York  has  fallen  to  one-quarter,  and  from  practically  nothing,  these 
four  ports  have  risen  to  about  one-third. 

It  would,  however,  be  unfair  to  the  position  of  the  complainant  to 
state  that  it  was  insisting  in  this  proceeding  upon  tlie  right  of  New 
York,  as  against  the  whole  country,  to  retain  the  proportion  of  the 
export  grain  traffic  which  that  port  has  formerly  done.  In  1896  of 
the  grain  and  flour  exported  through  the  six  Atlantic  ports,  Norfolk 
had  7.5  per  cent,  and  Newport  News  10  per  cent.  Until  1890  practi- 
cally nothing  had  gone  through  these  ports.  Export  business  is  done 
through  them  now  because  lines  of  transportation  have  been  opened  up 
and  strengthened  from  the  West  to  these  points  and  extensive  terminal 
facilities  provided.  Now  it  does  not  seem  to  be  the  contention  of  the 
complainant  that  a  portion  of  the  export  grain  ought  not  to  pass  over 
these  lines  and  through  these  ports ;  nor  is  there  any  claim  that  these 
two  ports  should  not  be  allowed  the  same  differential,  if  any,  as  Balti- 
more. The  com[672]plainant  insists  that  each  port  is  entitled  to  what 
it  can  fairly  obtain,  and  that  these  differentials  give  to  the  southern 
ports  an  unfair  advantage.    The  evidence  of  that  is  not  that  Norfolk 


NEW  YORK  PRODUCE  EXCHANGE  V.  B.  &  O.  R.  R.,  ET  AL. 


219 


and  Newport  News,  owing  to  recently  provided  facilities,  have  in- 
creased their  grain  exportations,  but  that  Boston,  Philadeli)hia  and 
Baltimore  have,  under  the  operation  of  these  ditferentials  and  without 
the  assistance  of  any  new  advantageous  conditions,  gained  as  against 
New  York.  In  other  words,  the  complainant  says  that  tlie  fair  test  of 
these  differentials  is  their  actual  working  as  observed  at  these  four 
ports  where  the  conditions  have  remained  the  same,  and  it  is  to  these 
ports  that  they  direct  attention. 

For  the  purpose  of  comparison  the  complainant  has  selected  the 
years  1882, 1895  and  1896.  The  alleged  reason  for  this  is  that  1882  was 
the  year  of  the  Advisory  Commission  when  the  present  differentials 
were  approved,  and  1895  and  1896  the  last  two  years  next  preceding 
this  investigation. 

The  last  half  of  Table  No.  6  gives  the  percentages  of  exports  of 
wheat,  corn  and  flour,  from  New  York,  Boston,  Philadelphia,  Balti- 
more, Norfolk  and  Newport  News  for  the  years  1873  to  1896,  inclusive. 
Those  percentages  for  the  years  in  question  are  as  follows : 


1882. 

1895. 

1896. 

13altimore          

9.6 
61.5 

7.5 
20.7 

13.7 

47.6 

7. 
19.8 

12.7 

Philadelphia    

33.7 

New  York 

Boston 

9.5 
26.6 

The  complainant  says  that  a  comparison  of  1882  with  1896  shows, 
roughly  speaking,  that  New  York  has  lost  one-half  its  export  business, 
that  Boston  has  gained  one-third,  Philadelphia  one-fourth,  and  Balti- 
more one-fourth.  While  that  is  the  showing  which  results  from  a  com- 
l>arison  of  these  two  years,  it  is  not  a  fair  deduction  from  the  table 
itself.  In  the  first  place  1882  is,  of  all  the  years  since  1875,  that  year 
in  which  the  percentage  of  New  York  was  the  largest,  that  year  in 
v/hich  the  percentage  of  Philadelphia  was  smaller  than  it  had  been  for 
eight  years  before,  and  smaller  than  it  was  again  for  five  years  to  fol- 
low; the  percentage  of  Baltimore  smaller  than  it  had  been  for  six 
years  preceding,  [673]  and  smaller  than  it  ever  has  been  since,  except 
in  the  year  1895,  when  it  was  a  trifle  lower. 

Excluding  from  our  consideration  the  year  1896,  we  observe  that 
the  percentage  of  New  York  in  1895  w^as  larger  than  it  had  been  in 
1894,  1892  or  1890,  and  but  12  per  cent,  below  the  average  from  1873 
to  1896;  that  the  percentage  of  Philadelphia  in  1895  was  smaller  than 
it  had  been  in  an}'  year  since  1875,  except  the  years  1888  and  1889, 
and  36  per  cent,  below  the  average ;  that  the  percentage  of  Baltimore 


220  ATLANTIC    PORT    DIFFERENTIALS 

for  that  year  was  smaller  than  it  had  been  since  1875  and  about  13 
per  cent,  below  the  average.  The  percentage  of  Boston  was  more  than 
it  had  ever  been  except  in  the  years  1888  and  1884,  and  about  42  per 
cent,  above  the  average. 

If,  therefore,  this  case  had  been  tried  in  the  spring  of  1896  instead 
of  1897,  the  tables  being  brought  down  to  the  close  of  1895,  instead  of 
to  the  close  of  1896,  it  would  hardly  be  claimed  that  those  tables  dis- 
closed any  undue  diversion  of  traffic  from  New  York  to  either  Phila- 
delphia or  Baltimore.  Baltimore  could  have  with  truth  asserted  that 
its  percentage  for  that  year  was  smaller  than  it  had  ever  been  before 
and  more  below  the  average  for  the  last  twenty  years  than  that  of 
New  York,  while  Philadelphia  might  well  have  said  that  its  percentage 
for  1895  was  less  than  one-half  what  it  had  been  in  1878  and  36  per 
cent,  below  the  average  for  the  last  twenty  years.  Boston  alone  would 
have  been  the  gainer,  but  Boston  has  never  enjoyed  a  differential. 

But  a  comparison  of  the  year  1896  with  1895,  or  indeed  with  almost 
any  previous  year,  makes  an  entirely  different  showing,  and  the  com- 
plainant insists  that  in  this  proceeding  the  results  for  the  year  1896 
are  entitled  to  more  conseciuence  than  those  of  any  one  or  indeed  all 
the  previous  years. 

Its  position  apparently  is  that  while  these  differentials  nominally 
existed  from  1877  down  to  January  1,  1896,  they  never  were  actually 
maintained  until  the  latter  date.  Of  course,  the  mere  existence  of 
these  differentials,  if  they  were  not  in  fact  collected,  could  have  no 
effect  to  divert  traffic  one  way  or  the  other,  and  if  we  were  satisfied 
that  there  had  been  no  differentials  in  effect  down  to  January  1,  1896, 
and  that  these  differentials  had  gone  into  effect  on  that  date  and  had 
since  that  time  been  rigorously  enforced  with  the  result  upon  the 
export  traffic  of  these  various  [674]  ports  which  that  year  apparently 
exhibits,  it  would  certainly  present  a  strong  case  for  the  complainant. 

We  are  not,  however,  as  indicated  by  the  findings  of  fact,  satisfied 
that  this  is  true.  The  testimony  of  the  complainant  conclusively  shows 
that  rates  were  not  maintained  in  the  year  1896.  From  that  testimony 
it  appears  that  grain  could  be  purchased  at  Philadelphia  and  Balti- 
more at  times  for  more  than  3  cents  per  bushel  below  the  price  at  New 
York,  while  at  other  times  the  price  would  be  practically  the  same  or 
occasionally  in  favor  of  New  York.  Now,  the  price  of  grain  is  de- 
termined by  the  Chicago  market,  and  the  price  in  these  various  ports 
is  obtained  by  adding  to  that  price  the  freight  rate.  The  Baltimore 
differential  is  less  than  ly^  cents  per  bushel.  It  follows,  therefore, 
almost  of  necessity  that  these  fluctuations  indicate  manipulations  in  the 
rate.    When  corn  is  worth  the  same  price  in  Baltimore  and  New  York 


NEW  YORK  PRODUCE  EXCHANGE  V.  B.  &  O.  R.  R.,  ET  AL.  221 

the  presumption  is  that  the  differential  is  not  maintained,  and  wiien 
corn  is  worth  3  cents  a  bushel  less  in  Baltimore  tlian  in  New  York  the 
presumption  is  that  a  greater  difference  than  the  differential  has  been 
made.  In  support  of  its  proposition  the  complainant  relies  mainly  upon 
testimony  of  iNIr.  Blanchard,  the  commissioner  of  tlie  Joint  Traffic 
Association.  Mr.  Blanchard  testified  that  he  had  been  familiar  witli 
freight  rates  since  before  1878  and  that  in  his  opinion  those  in  question 
were  better  maintained  beginning  January  1,  1896,  when  the  Joint 
Traffic  Agreement  went  into  effect,  than  they  had  been  at  any  previous 
period  except  for  the  year  or  year  and  a  half  following  the  enactment 
of  the  Act  to  Regulate  Commerce.     This  Act  went  into  effect  April  1, 

1887,  and  if  we  were  to  give  Mr.  Blanchard 's  testimony  its  full  effect 
it  would  still  remain  that  rates  were  as  well  maintained  in  1887  and 
the  first  part  of  1888  as  they  were  during  the  year  1896.  This  being 
so,  and  no  reason  being  suggested  to  the  contrary,  it  is  fair  to  assume 
that  the  maintenance  of  the  differential  would  have  produced  the 
same  effect  of  1887  and  the  year  following  that  it  did  in  1896.  We 
should  expect  to  find,  therefore,  the  same  remarkable  falling  oft'  at 
New  York  and  the  same  increase  at  Baltimore  and  Philadelphia.  But 
upon  turning  to  complainant's  Table  No.  6  we  find  that  the  percentage 
of  New  York  in  1887  was  53.9,  an  actual  increase  over  the  preceding 
year,  and  just  about  the  average  from  1873  to  1896  inclusive ;  that  the 
percent [675]  age  of  Philadelphia  was  10  per  cent.,  an  increase  over  the 
previous  year  but  below  the  average;  while  that  of  Baltimore  was 
23.3  per  cent.,  a  falling  off  as  to  the  previous  year.     During  the  year 

1888,  while  the  salutary  effect  of  the  Interstate  Commerce  Law  may 
be  presumed  to  have  still  lingered,  we  find  that  New  York  had  further 
increased  its  percentage  to  54.2,  while  Philadelphia  had  fallen  to  6.2, 
the  lowest  in  her  history,  and  Baltimore  had  risen  to  24.5.  The  effect 
of  enforcing  the  differential  in  1887  and  1888  was  apparently  to  raise 
rather  than  to  lower  the  percentage  of  New  York.  We  see  no  reason 
for  giving  the  year  1896  any  greater  prominence  than  is  given  to  every 
other  year. 

For  the  purpose  of  comparing  the  four  ports  Table  No.  14  is  per- 
haps the  best.  That  does  not  include  exportations  of  flour,  but  it  has 
been  already  observed  that  flour  and  provisions  are  exported  entirely 
by  berth  rate  and  an  examination  of  the  tables  covering  those  articles 
shows  that  New  York  has  little  if  anything  to  gain  by  an  investigation 
into  the  movement  of  these  commodities.  From  the  nature  of  the  case 
the  differential  produces  the  most  effect  in  the  movement  of  grain. 
This  table,  therefore,  which  embraces  only  wheat,  corn  and  oats,  is  as 
favorable  to  New  York  as  any  can  be.    The  years  covered  are  1878  to 


222  ATLANTIC    PORT   DIFFERENTIALS 

1896,  inclusive,  so  that  the  movement  of  these  articles  is  exhibited  over 
substantially  the  whole  period  during  which  the  present  differentials 
have  been  in  operation. 

An  examination  of  this  table  shows  in  the  first  place  that  the  per- 
centages of  these  four  cities  vary  from  year  to  year,  and  that  this 
variation,  so  far  as  can  be  observed,  does  not  obey  any  rule  or  law.  It 
might  be  thought,  inasmuch  as  the  differential  operates  especially  in 
the  case  of  full  cargoes,  and  as  full  cargo  shipments  are  more  numer- 
ous when  exports  are  large,  that  the  percentage  of  New  York  and 
Boston  would  decline  and  the  percentages  of  Philadelphia  and  Balti- 
more would  rise  in  those  years  when  the  total  exports  were  the  largest, 
and  this  may  be  to  some  extent  the  case ;  but  it  appears  that  in  1890 
and  1891  the  total  volume  of  exports  through  these  four  ports  was 
almost  identical  while  the  difference  in  the  percentage  between  New 
York,  Philadelphia  and  Baltimore  was  nearly  as  great  as  in  any  other 
two  years  down  to  1896.  A  study  of  these  fluctuations  emphasizes  what 
has  already  been  said  in  the  findings  of  fact,  namely,  that  [676]  the 
conditions  governing  the  price  of  ocean  freights  and  the  movement  of 
this  grain  are  so  complex  that  it  is  impossible  to  predict  from  the 
knowledge  of  any  one  factor,  like  the  quantity  of  the  exports,  what 
channel  they  will  take. 

It  is  apparent  in  the  second  place  that  it  is  altogether  unsatisfactory 
to  compare  any  single  year  with  any  otlier  year  and  that  any  deduc- 
tion from  such  a  comparison  is  almost  certain  to  be  misleading. 

Suppose  the  port  of  Philadelphia  in  1888  had  complained  that  the 
differentials  in  its  favor  were  not  sufficient  and  had  cited  in  illustra- 
tion the  fact  that  its  exports  had  fallen  from  12.04  the  previous  year 
to  -4.42  per  cent,  that  .year,  and  that  the  exports  from  New  York  had 
risen  from  60.59  to  65.58  per  cent,  its  case  would  have  been  almost  as 
strong  as  that  made  by  the  complainant,  and  yet  in  the  year  1890 
the  percentage  of  New  York  had  fallen  to  49.31,  while  that  of  Phila- 
delphia had  risen  to  18.42,  and  that  of  Baltimore  to  26.38.  In  1891 
New  York  had  again  risen  to  63.75  while  Philadelphia  had  fallen  to 
9.82  and  Baltimore  to  19.65;  and  in  1892  New  York  had  once  more 
fallen  to  48.79,  while  Philadelphia  had  risen  to  19.95  and  Baltimore 
to  24.24. 

A  comparison  of  averages  is  somewhat  more  satisfactory.  Table 
No.  13  embraces  the  ports  of  Portland,  Norfolk  and  Newport  News 
in  addition  to  the  four  under  consideration,  and  states  the  percentage 
of  each  to  the  group  for  the  period  of  1878  to  1881  inclusive,  and  from 
1882  to  1896  inclusive.  By  reference  to  this  it  will  be  seen  that  the 
percentage  of  New  York  for  the  first  period  was  51.76  and  for  the 


NEW  YORK  PRODUCE  EXCHANGE  V.  B.  &  O.  R.  R.,  ET  AL.  223 

last  period  51.16;  of  Philadelphia  for  the  first  period  15.1.3  and  for 
the  last  period  10.76;  of  Baltimore  for  the  first  period  25.05  and  for 
the  last  period  23.20.  These  averages  do  not  indicate  any  falling  off 
in  the  case  of  New  York  and  do  indicate  a  very  large  falling  off  in  the 
case  of  Philadelphia  and  a  slight  decrease  in  the  case  of  Baltimore. 

None  of  these  tables  are  absolutely  correct,  nor  are  they  in  all  cases 
([uite  consistent  with  one  another.  It  is  also  possible  to  marshal  these 
figures  in  such  a  way  as  to  point  to  radically  different  conclusions. 
Generally  speaking,  however,  the  tables  do  agree  in  their  main  fea- 
tures, and  the  trend  of  all  these  statistics  is  to  the  same  conclusion. 
Taking  the  whole  period  together  from  1878  down  to  the  end  of  the 
year  1896,  it  is  pretty  apparent  that  [677]  of  these  four  ports  as  com- 
pared with  one  another  Boston  has  been  a  decided  gainer,  Baltimore 
has  made  a  small  gain,  while  New  York  and  Philadelphia  have  both 
lost,  and  as  between  these  two,  Philadelphia  has  been  the  greater  loser. 
Compared  with  the  entire  group  New  York  has  lost. 

If,  instead  of  considering  the  entire  period,  we  were  to  take  the 
year  1896  alone,  the  result  would  be  entirely  different,  but  it  has  been 
already  said  that  no  special  prominence  can  be  given  to  that  year 
over  any  other  year,  certainly  not  over  the  years  1887  and  1888.  One 
very  great  embarrassment  in  disposing  of  this  case  arises  "from  the 
feeling  that  these  rates  have  not  been  maintained,  and  that  there  is  no 
reliable  indication  in  actual  practice  of  what  the  effect  of  the  differen- 
tials would  be  if  strictly  enforced.  This  is  no  reason  why  we  should 
not  alter  the  differential  if  it  was  found  to  be  wrong,  for  we  must  as- 
sume that  the  published  rate  is  collected,  but  when  the  effect  of  the 
differential  is  relied  upon  to  show  the  wrong,  and  it  is  claimed  that  the 
differential  has  been  enforced  in  a  particular  year  and  has  not  been 
enforced  in  other  years,  that  fact  must  be  clearly  established. 

The  results  of  the  year  1896  show  a  very  unusual  iiercentage  in 
favor  of  Baltimore  and  a  large  increase  in  favor  of  Philadelphia,  and 
it  is  our  impression  that  these  two  ports  will  perhaps  obtain  in  the 
future  rather  more  than  their  average  for  the  last  twenty  years.  But 
this  impression  is  based  not  upon  any  deduction  from  these  tables  but 
upon  the  further  impression  that  the  lines  leading  to  Baltimore  are  in 
a  position  to  demand  more  of  this  traffic  than  they  have  obtained  at 
least  in  recent  years,  and  that  the  port  of  Philadelphia  will  not,  when 
the  improvements  in  the  Delaware  River  give  it  deep  water  to  the 
ocean,  and  perhaps  ought  not  to  rest  content  with  the  small  amount 
of  foreign  trade  which  it  has  en.ioyed  in  the  past.  If  these  ports  gain, 
it  must  be  largely  at  the  expense  of  New  York. 

Now,  uppi]  the  whole  situation,  does  the  complainant  make  out  a 


224  ATLANTIC    PORT   DIFFERENTIALS 

case?  Can  it  be  said  that  these  differentials  unduly  discriminate 
against  the  locality  of  New  York?  We  have  stated  it  as  our  impres- 
sion that  the  difference  in  ocean  freight  rates  at  the  present  time  was 
something  less  than  the  amount  of  these  differentials,  and  that  the 
gradual  change  of  conditions  since  1877  makes  the  differentials  of 
more  effect  to-day  than  when  they  were  instituted.  [678]  These  two 
circumstances  would  point  strongly  to  the  conclusion  that  they  ought 
to  be  modified.  There  is,  however,  one  other  circumstance  that  should 
be  noticed  in  this  connection. 

These  differentials  apply  upon  all  classes  of  freight  and  accordingly 
upon  all  commodities.  In  the  very  nature  of  the  case  they  cannot  be 
abstractly  just,  but  only  fair  in  the  aggregate  result.  Their  purpose  is 
to  give  to  each  line  its  fair  share  of  export  business.  INIany  other  com- 
modities are  exported  besides  those  embraced  in  this  proceeding.  In 
case  of  grain  the  freight  rate  is  a  very  large  factor  in  its  value,  while  in 
case  of  other  exports  it  may  be  insignificant.  A  differential  which  de- 
termines the  route  by  which  grain  shall  be  exported  would  have  no 
effect  Avhatever  upon  some  other  article.  These  higher  grade  exports 
go  almost  entirely  to  the  port  of  New  York,  from  which  they  find 
quicker  service  to  all  parts  of  the  world,  and  from  which  they  can  only 
find  communication  with  many  parts  of  the  world.  Now,  if  the  quan- 
tity of  these  exports,  which  the  differential  does  not  divert  to  Baltimore 
or  Philadelphia,  has  been  increased  in  late  years,  it  is  manifest  that  this 
offsets  to  that  extent  any  increased  diversion  of  grain  to  the  outports. 
The  freight  rate  which  these  other  exports  pay  is  higher,  and  it  is 
therefore  more  for  the  interest  of  the  carrier  to  transport  them.  The 
ocean  rate  is  also  higher,  and  the  advantages  to  the  port  of  New  York 
in  the  way  of  attracting  shipping  are  probably  greater  than  arise  from 
the  exportation  of  grain.  So  it  is  by  no  means  certain  that  more  grain 
ought  not  to  go  through  the  outports  to  offset  the  increased  exports  of 
other  kinds  from  New  York. 

That  this  may  be  so  is  indicated  by  Table  No.  9,  which  gives  the  total 
quantity  of  traffic  forwarded  by  all  lines  to  these  four  localities  for  the 
3^ears  1888  to  1896  inclusive.  From  this  it  appears  that  during  these 
eight  years  the  total  number  of  tons  had  increased  42  per  cent,  in  the 
case  of  Baltimore,  97  per  cent,  in  the  case  of  Boston,  63  per  cent,  in  the 
case  of  New  York,  and  but  2  per  cent,  in  the  case  of  Philadelphia. 
These  figures  include  both  domestic  and  foreign  traffic  and  are  not 
therefore  of  great  significance  as  bearing  upon  this  question,  but  they 
show  that  traffic  over  the  lines  leading  to  New  York  has,  during  the 
last  eight  years,  increased  more  in  proportion  than  that  over  thos'B 
leading  to  Baltimore  and  Philadelphia. 


NEW  YORK  PRODUCE  EXCHANGE  V.  B.  &  O.  R.  R.,  ET  AL.  225 

[679]  Table  No.  15  perhaps  bears  more  directly  upon  this  sugges- 
tion. This  table  gives  the  percentages  of  the  value  of  all  exports  from 
Boston,  New  York,  Philadelphia,  Baltimore,  Norfolk  and  Newport 
News  from  1878  to  1896  inclusive.  From  this  it  appears  that  New 
York  exported  in  1878,  69.26  per  cent,  as  against  60.34  in  1896;  Phila- 
delphia 9.-1:2  as  against  7.68;  and  Baltimore  9.63  as  against  11.63;  it 
further  appears  that  the  percentage  of  New  York  in  1892  was  but 
59.97  while  in  1896  it  was  60.34.  From  this  it  seems  that  New  York 
exported  in  1896  almost  the  same  proportion  in  value  that  it  did  in 
1878,  and  that  its  percentage  that  year  notwithstanding  the  very  great 
falling  ofif  in  grain  exportations,  was  more  than  it  had  been  in  at 
least  one  previous  year  and  substantially  the  same  as  it  had  been  since 
1890. 

It  seems  to  be  true  that  New  York  is  in  a  measure  losing  its  export 
grain  business.  But  does  it  follow  upon  the  testimony  in  this  case  that 
this  is  due  to  the  operation  of  these  differentials? 

It  must  be  borne  in  mind  that  the  grain  of  New  York  does  not  reach 
that  port  from  the  interior  exclusively  by  rail.  The  canal  has  brought 
in  the  past  a  very  considerable  portion  of  that  traffic,  and  it  is  to  this 
water  communication  between  the  West  and  the  East  that  New  York 
has  largely  owed  its  predominance  in  the  foreign  trade.  Now,  these  dif- 
ferentials have  nothing  to  do  with  grain  moving  by  canal.  Their  pur- 
pose is  merely  to  divide  fairly  between  the  different  competing  lines  the 
export  business  which  moves  by  rail.  If  for  any  reason  the  canal  were 
to  be  entirely  shut  up  so  that  no  grain  could  be  transported  by  it,  it 
would  by  no  means  follow  that  all  the  grain  which  had  formerly  come 
to  New  York  by  canal  ought  now  to  come  there  by  rail.  Quite  the  con- 
trary. This  canal  traffic  ought  now  to  be  distributed  in  the  same  pro- 
portions over  the  various  lines  leading  to  the  different  ports.  New 
York  has  no  vested  right  in  the  having  of  so  much  grain  shipped  to 
that  port.  The  canal  has  been  a  most  important  element  in  her  com- 
mercial supremacy.  If  that  element  drops  out,  she  must  expect  to  lose 
that  portion  of  her  supremacy  which  was  due  to  it. 

The  first  half  of  complainant's  table  No.  6  shows  the  percentage  of 
all  wheat,  corn  and  flour  in  bushels  transported  to  the  six  ports  in 
question,  from  the  year  1873  to  the  year  1896,  inclusive;  and  with 
reference  to  New  York  these  percentages  are  stated  [680]  both  by  rail 
and  by  canal.  Thus,  in  1877,  when  these  differentials  were  agreed 
upon,  the  rail  carriers  transported  to  New  York  25  per  cent,  and  the 
canal  26.5  per  cent,  of  the  entire  amount  going  to  all  the  ports,  and  for 
the  whole  series  of  years  the  rail  lines  have  averaged  32.4  per  cent,  and 
the  canal  19.6  per  cent.  In  the  year  1896  the  rail  lines  carried  30.3 
15 


226  ATLANTIC    PORT   DIFFERENTIALS 

per  cent,  and  the  canal  6.8  per  cent.,  that  is,  of  the  great  falling  off 
at  New  York,  the  bulk  of  it  was  in  canal  carriage.  If  the  canal  had 
transported  in  3896  the  same  percentage  that  it  did  in  1877  the  grain 
exports  through  New  York  would  have  been  relatively  larger  that  year 
than  the  average,  and  if  it  had  transported  even  the  average  quantity, 
they  would  have  shown  no  remarkable  falling  off. 

As  already  suggested,  these  differentials  are  intended  to  secure  to 
the  rail  lines  a  proper  distribution  of  this  traffic,  and  we  find  that 
under  their  operation  in  1895  those  lines  carried  to  New  York  a  larger 
per  cent,  of  all  the  traffic  to  these  six  ports  than  they  had  ever  carried 
save  in  the  year  1891,  which  was  substantially  the  same.  Can  it  be 
said,  therefore,  that  their  operation  as  applied  to  the  traffic  which  they 
properly  affect,  has  been  unfair  in  the  result?  The  great  supremacy  of 
New  York  in  the  past  has  been  measurably  due  to  its  canal.  If  it  would 
hold  that  supremacy  in  the  future,  it  must  give  attention  to  that  same 
waterway.  The  testimony  of  Captain  Depuy  as  to  excessive  elevator 
charges  upon  canal  grain  is  not  material  to  this  investigation,  but  it 
is  extremelj^  suggestive  in  connection  with  the  facts  above  referred  to. 
If  the  canal  were  to  be  restored  to-day  to  the  same  position  in  this 
carrying  trade  that  it  has  occupied  in  the  twenty  years  past,  the  com- 
merce of  the  port  of  New  York  could  not  suffer. 

The  Baltimore  differential  presents  the  most  difficult  question.  To 
every  practical  intent  the  cost  of  ocean  freights  from  Baltimore  is  no 
greater  than  from  Philadelphia  ;  nor  did  it  appear  that  Philadelphia 
afforded  other  advantages  over  Baltimore  in  the  transaction  of  this 
export  business.  What  ground  is  there  then  for  a  distinction  between 
those  two  ports  ? 

The  representatives  of  Baltimore  strenuously  insisted  that  the 
proximity  of  that  port  to  the  corn  area  was  such  that,  by  reason  of  the 
greater  advantage  in  the  way  of  distance,  it  was  entitled  to  more  of  this 
business.  An  examination  of  Table  No.  14  shows  that  in  recent  years 
at  least  the  percentage  of  corn  exports  through  [681]  Baltimore  has 
been  larger  than  of  wheat.  The  great  advantage  of  Baltimore  in  1896 
rested  in  the  very  great  increase  of  corn  shipments.  It  is  a  significant 
fact  that  the  distance  differentials  Avhich  were  in  force  for  a  short  time 
in  1877  seem  to  have  been  unsatisfactory  to  the  New  York  lines,  not 
because  the  difference  in  the  percentage  of  the  distances  from  Chicago 
gave  to  Baltimore  too  great  an  advantage,  but  because  the  distances 
from  other  points  were  in  favor  of  that  city.  The  differential  which 
Baltimore  obtained  upon  the  Chicago  rate  by  the  distance  differential 
was  almost  exactly  what  was  obtained  under  the  arbitrary  differential, 
but  when  the  distance  differential  was  applied  to  all  points  from  which 


NEW  YORK  PRODUCE  EXCHANGE  V.  B.  &  O.  R.  R.,  ET  AL.  227 

traffic  originated,  I^altiiiior(>  seenis  to  have  profited  to  sneli  an  extent 
tliereb.y  that  this  system  only  remained  in  force  for  a  very  few  niontlis. 
This  would  indicate  that  possibly  the  traffic  does  orio'inate  at  points 
relatively  nearer  Baltimore  than  is  Chicago.  I  Tow  far  this  fact  may 
be  recognized  in  the  present  system  by  which  rates  from  western  point;^ 
are  based  upon  a  percentage  of  the  New  York-Chicago  rate,  does  not 
appear. 

The  testimony  tended  to  show  that  the  corn  exported  at  Baltimore 
did  not  come  from  Chicago,  but  was  intercepted  before  it  reached  that 
market.  If,  in  point  of  fact,  Baltimore  is  in  closer  proximity  to  the 
corn  fields  from  whieh  these  exports  come,  and  if  the  lines  leading  to 
that  port  have  secured  recognition  of  that  fact  in  these  differentials, 
we  certainly  should  not  disturb  them,  for  they  are  a  recognition  of  an 
advantage  in  location  to  which  Baltimore  is  fairly  entitled. 

No  claim  is  made  as  between  Baltimore  and  Philadelphia,  that  the 
present  relation  should  be  disturbed.  As  between  those  two  cities  and 
New  York,  it  might  not  be  altogether  easy  to  say  whether,  on  the  case 
presented,  the  Philadelphia  differential  should  be  raised  or  the  Balti- 
more differential  lowered.  It  might  be  that  in  justice  to  the  city  of 
Philadelphia  we  ought  to  make  that  differential  more  rather  than  the 
Baltimore  less. 

It  must  be  remembered,  moreover,  that  to  the  solution  of  this  rpies- 
tion  no  absolute  standard  can  be  applied.  In  recognizing  competitive 
conditions  of  this  kind  the  carrier  has  a  certain  latitude  within  which 
this  Commission  cannot  interfere  It  is  only  when  that  limit  is  ex- 
ceeded and  when  the  action  of  the  carrier  becomes  undue  that  we  can 
net.  In  the  last  utterance  of  [682]  the  United  States  Supreme  Court 
on  this  subject.  Interstate  Cotnmerce  Commission  v.  Alahamn  Mi<Uand 
R.  Co.,  168  U.  S.  14-t,  42  L.  ed.  414,  it  was  held  that  the  Alabama  ]\Iid- 
land  Railway  might  charge  a  higher  rate  to  Montgomery,  the  more  dis- 
tant point,  than  it  charged  to  Troy,  the  nearer  point.  This  was  upon 
the  ground  that  IMontgomery  was  a  railway  center  and  that  the  com- 
petitive forces  at  that  point  might  be  recognized  in  the  making  of  rates. 
Suppose  now  that  the  Alabama  Midland  Railwa^^  Company  had  elected 
to  charge  the  same  to  Montgomery  and  to  Troy,  could  the  locality  of 
Montgomery  have  insisted,  in  a  proceeding  before  this  Commssion, 
that  IMontgomery  was  entitled  to  a  better  rate  than  Troy?  Clearly  not. 
Whether  the  carrier  will  or  will  not  meet  those  competitive  conditions 
and  to  what  extent  rests  primarily  with  it,  and  its  action  in  that  respect 
is  not  subject  to  review  by  this  tribunal  so  long  as  it  is  due  and  reason- 
able. Whether  it  is  due  or  reasonable  is,  however,  a  matter  of  judicial 
investigation  and  determination  by  the  Commission  and  the  courts. 


228  ATLANTIC    PORT   DIFFERENTIALS 

"While  there  is  much  in  the  case  to  induce  a  different  conclusion,  and 
while  we  have  arrived  at  this  conclusion  with  a  good  deal  of  hesitation, 
we  do  not  think  that,  upon  the  present  record,  the  carriers  have  ex- 
ceeded the  limit  within  which  they  are  free  to  determine  for  themselves. 
The  principle  upon  which  these  differentials  have  been  established  is 
legitimate.  Looking  to  the  basis  of  the  differentials  themselves,  while 
there  is  much  to  indicate  that  they  should,  perhaps,  be  somewhat  modi- 
fied, it  cannot  be  affirmed  with  certainty  that  they  are  wrong.  Con- 
sidering their  effect  as  exhibited  through  a  long  series  of  years,  it  is  im- 
possible to  say  that  they  had  exercised  any  untoward  or  unnatural  in- 
tiuence  upon  traffic.  We  do  not  think,  therefore,  that  they  should  be 
disturbed  by  us. 

The  Act  to  Regulate  Commerce  does  not  aim  to  fetter  competition,  nor 
interfere  with  the  natural  flow  of  trade  and  commerce.  One  cardinal 
object  of  that  act  was  to  secure  perfect  freedom  of  competition  among 
the  carriers  themselves.  It  is  only  when  that  competition  becomes 
tyrannical,  so  to  speak,  when  in  the  competitive  struggle  localities, 
commodities,  indviduals  are  in  danger  of  being  crushed  that  the  law 
steps  in.  In  the  very  nature  of  things  it  can  seldom  happen  that  the 
powerful  commercial  center  [683]  has  occasion  to  invoke  the  law  for 
protection  against  its  weaker  rivals.  The  lines  which  extend  to  the 
port  of  New  York  are  numerous,  powerful,  and  aggressive.  It  is  diffi- 
cult to  believe  that  those  lines  will  ever  suffer  any  great  or  permanent 
injury  to  the  commerce  of  that  port,  when  in  permitting  that  they  must 
submit  to  a  depletion  of  their  own  revenues.  It  might  happen  that 
some  combination  of  these  lines,  for  the  purpose  of  promoting  their 
interests  at  some  other  point,  would  sacrifice  the  port  of  New  York,  or 
that  for  the  purpose  of  promoting  their  interests  as  to  some  other  kind 
of  traffic  they  would  sacrifice  this  particular  traffic.  If  anything  of 
that  sort  were  apparent,  if  there  seemed  to  be  anj^thing  arbitrary,  any- 
thing unreasonable,  any  undue  preference  against  this  locality  or  this 
species  of  traffic,  it  would  be  our  duty  to  correct  it.  But  there  is  noth- 
ing of  that  kind  and  we  can  do  no  better  than  to  leave  this  matter 
where  competition  has  left  it. 

In  coming  to  this  conclusion  we  have  perhaps  been  somewhat  in- 
fluenced by  the  fact  that  the  consequence  of  an  error  in  this  direction 
is  not  as  serious  as  one  in  the  other  direction  might  be.  The  pecuniary 
importance  of  these  differentials  to  the  carriers  interested  has  already 
been  suggested.  Their  importance  in  the  distribution  of  traffic  may  be 
even  greater.  If  it  were  possible  to  abolish  them  altogether  and  abso- 
lutely enforce  the  same  rate  to  all  these  ports,  it  might  so  deplete  the 
revenues  of  lines  to  southerly  ports  as  to  render  practically  valueless 


NEW  YORK  PRODUCE  EXCHANGE  V.  B.  &  O.  R.  R.,  ET  AL.  229 

the  outlay  of  enormous  sums  spent  in  their  development.  Upon  the 
other  hand,  if  we  wrongfull.y  refuse  to  interfere,  it  simply  follows  that 
foreign  trade  which  ought  to  pass  through  New  York  is  diverted  to 
some  rival  port.  This,  considering  the  manner  in  which  this  export 
grain  business  is  conducted,  does  not  mean  the  breaking  down  or  the 
building  up  of  any  industry.  It  destroys  no  capital  invested,  it  ren- 
ders no  dock  and  no  shij)  useless.  At  the  most,  it  simply  determines 
where  some  new  dock  shall  be  built.  If  this  were  a  question  of  an 
unreasonable  rate,  where  the  thing  complained  of  was  the  exaction 
of  more  than  a  just  compensation  by  the  carrier,  where  whatever  the 
carrier  gained  unjustly  was  necessarily  paid  by  the  public,  the  conse- 
quences of  an  error  would  be  more  evenly  balanced. 

Again,  if  we  have  made  an  error,  it  is  in  favor  of  the  weak  and  [684] 
against  the  strong.  New  York  may  have  lost  somewhat  in  the  matter 
of  its  foreign  commerce,  but  it  is  still  immeasurably  in  advance  of  all 
rivals.  As  appears  from  Table  No.  19,  which  is  brought  down  to 
January  1,  1898,  in  the  year  1897  New  York  had  47,43  per  cent  of  all 
the  exports  moving  out  through  the  Atlantic  and  Gulf  ports  of  the 
United  States  and  74.06  per  cent,  of  the  total  imports  moving  in 
through  those  same  ports.  It  is  almost  impossible  for  us  to  feel  that  a 
locality  which  engrosses  one-half  of  all  the  exports  and  three-fourths 
01  all  the  imports  upon  the  Atlantic  seaboard  can  justly  complain  of 
any  undue  diversion  of  its  commerce.  The  population  of  Greater  New 
York  is  said  to  be  about  3,000,000;  the  population  of  Philadelphia, 
distant  less  than  100  miles,  is  1,200,000.  In  1897  the  imports  of  Phila- 
delphia were  about  one-tentli  and  the  exports  about  one-eighth  of  those 
at  New  York,  Can  it  be  said  that  Philadelphia  is  unduly  preferred  to 
New  York  in  respect  to  this  foreign  trade  ? 

Nothing  has  been  said  in  the  disposition  of  this  case  touching  tlie  ex- 
lake  differentials  as  such.  These  apply,  it  will  be  remembered,  to 
traffic  originating  in  the  West,  brought  by  water  to  various  points 
upon  the  southern  shore  of  Lake  Erie  or  corresponding  points  and  from 
thence  transported  by  rail  to  the  ports  in  question.  The  complainant 
insists  that  whatever  may  be  said  of  the  all-rail  differentials  these  are 
absolutely  indefensible  since  the  distances  to  Baltimore,  Philadelphia 
and  New  York  are  practically  the  same. 

If  the  justification  for  the  all-rail  differentials  were  found  in  differ- 
ences of  distance,  that  would  be  true.  It  appears,  however,  tliat  while 
distance  is  an  element  which  may  be  taken  into  account  in  intpiiriiig 
whether  those  differentials  are  undue  and  unreasonable,  it  is  not  the 
ground  upon  which  they  are  made.  This  ex-lake  traffic  originates  at 
the  same  points  with  the  all-rail  traffic  and  is,  therefore,  properly  re- 


230  ATLANTIC    PORT   DIFFERENTIALS 

garded  as  competitive.  Looking  to  the  differential  itself,  we  find  that 
no  distinction  is  made  between  Baltimore  and  Philadelphia,  thus  re- 
moving what  seemed  to  be  the  most  serious  objection  to  the  all-rail  dif- 
ferentials. We  also  find  that  the  amount  in  one  hundred  pounds  is  but 
1  cent  against  New  York.  There  are  in  force  commodity  rates  on 
grain  by  the  bushel  which,  when  translated  into  rates  by  the  hundred 
[685]  pounds,  amount  to  about  1%  cents  per  hundred  pounds  against 
New  York,  upon  wheat,  corn  and  oats.  This  probably  does  not  exceed 
the  difference  in  cost  of  ocean  carriage.  It,  therefore,  our  decision  in 
reference  to  the  all-rail  differentials  is  correct,  it  seems  to  follow  all  the 
more  that  the  ex-lake  differentials  should  not  be  disturbed  by  us. 

Neither  have  we  considered  the  legality  or  propriety  of  the  Joint 
Traffic  Association,  for  the  reason  that  those  questions  are  not  involved 
in  this  proceeding.  If  that  association  is  in  violation  of  some  other 
statute  of  the  United  States,  we  have  nothing  to  do  with  it.  If  it  is  in 
violation  of  the  fifth  section  of  the  Act  to  Eegulate  Commerce,  as  a 
pooling  arrangement,  then  we  might  upon  proper  proceedings  order 
the  carriers  to  cease  and  desist  from  further  maintaining  it.  Such  is 
not  directly  nor  indirectly  the  scope  of  this  proceeding.  The  existence 
and  methods  of  that  association  could  only  become  relevant  in  this  case 
with  a  view  to  finding  and  enforcing  a  remedy  if  one  was  called  for. 
Since  we  have  found  no  infraction  of  law,  no  remedy  need  be  sought, 
and  all  questions  in  regard  to  that  association  become  immaterial. 

In  arriving  at  these  conclusions  the  year  1896  has  been  treated  the 
same  as  previous  years  covered  by  the  investigation.  If  the  diversion 
of  export  grain  from  the  port  of  New  York,  which  is  shown  to  have 
taken  place  in  that  year,  should  continue  in  subsequent  years,  and  it 
should  appear  with  reasonable  certainty  that  the  published  rates  had 
been  maintained  to  all  the  ports,  the  actual  effect  of  these  differentials 
upon  the  movement  of  grain  could  be  determined  with  confidence  and 
a  different  question  would  be  presented,  which  might  merit  further 
consideration,  and  of  which  the  disposition  of  the  present  case  would 
not  be  controlling. 

The  complaint  is  dismissed  without  prejudice. 


EDWARD  KEMBLE 

V. 

BOSTON  &  ALBANY  RAILROAD  COMPANY,  ET  AL. 

8  I.  C.  C.  110. 


231 


EDWARD    KEMBLE 

V. 

BOSTON  &  ALBANY  RAILROAD  COMPANY,  ET  AL. 

Decided  March  7, 1889. 
(8  I.  C.  C.  110.) 

1.  It  is  not,  as  matter  of  law,  a  violation  of  the  Act  to  Regulate  Commerce  to 
make  a  lower  rate  to  the  port  of  export  upon  trafSc  which  is  exported  than 
upon  that  which  is  locally  consumed,  for  the  export  rate  is  in  essence  the  divi- 
sion of  a  through  rate. 

2.  The  decision  of  the  Commission  in  New  York  Board  of  Trade  4'  Transporta- 
tion V.  Pennsylvania  E,  Co.,  et  al.,  having  been  overruled  by  the  United  States 
Supreme  Court  in  Texas  cj^  Pacific  Eailway  Co.  v.  Interstate  Commerce  Com- 
mission, 162  U.  S.  197,  40  L.  ed.  940,  5  Inters.  Com.  Rep.  405,  it  follows  that 
carriers  are  not,  as  a  matter  of  law,  prohibited  from  making  rates  from  points 
in  the  United  States  to  points  in  foreign  countries,  or  from  points  in  foreign 
countries  to  points  in  the  United  States,  of  which  the  inland  division  or  share 
accruing  to  carriers  within  the  United  States  is  less  than  the  tariff  rate  of 
such  carriers  on  domestic  shipments  of  similar  commodities. 

3.  Through  tariffs  showing  total  charges  on  export  traffic  from  interior  points  in 
the  United  States  to  destinations  in  foreign  countries  cannot,  owing  to  the 
fluctuation  in  ocean  rates,  usually  be  determined  and  published  in  accordance 
with  section  six  of  the  Act  to  Regulate  Commerce;  and  if  the  inland  carrier 
publishes  and  maintains  its  division  of  the  through  export  rate  it  apparently 
does  all  that  it  can  do,  and  all  that  it  is  required  to  do  under  that  section ; 
but  if  the  inland  carrier,  instead  of  receiving  a  fixed  inland  division,  makes 
through  rates  in  fact  of  which  its  division  fluctuates,  a  question  arises  as  to 
the  publication  of  such  rates,  which  is  not  passed  upon  in  this  proceeding. 
New  York,  New  Haven  4'  Hartford  R.  Co.  v.  Piatt,  7  Inters.  Com.  Rep.  323, 
cited  and  distinguished. 

4.  Import  and  export  traffic  is  not  removed  from  the  .iurisdiction  of  the  Com- 
mission by  the  decision  of  the  United  States  Supreme  Court  in  Texas  cf-  Pacific 
Railway  Co.  v.  Interstate  Commerce  Commission,  162  U.  S.  197,  40  L.  ed.  940, 
5  Inters.  Com.  Rep.  405,  but,  on  the  contrary,  the  effect  of  that  decision  is  to 
extend  such  jurisdiction;  and  the  Commission  has  full  authority  to  ])ass  upon 
the  grievance  of  any  individual  or  locality  which  is  alleged  to  arise  from  rates 
upon  export  or  import  goods  as  compared  with  rates  on  domestic  merchandise. 

5.  Defendants  make  two  rates  on  grain  and  sixth  class  merchandise  from  Chicago 
to  Boston.  If  the  commodity  is  for  local  consumption  the  rate  is  2  cents 
above  the  rate  to  New  York ;  but  if  the  commodity  is  to  be  exported  the  Bos- 
ton rate  is  the  same  as  the  New  York  rate.  The  exjiort  traffic  is  delivered  to 
the  ocean  carrier  at  East  Boston,  which  is  a  few  miles  more  distant  than  Bos- 
ton from  Cliicago,  and  the  export  rate,  which  is  essentially  the  inland  carrier's 
division  of  a  through  export  rate,  applies  in  fact  only  to  East  Boston.  The 
domestic  rate  to  Boston  is  substantially  as  fixed  by  the  Commission  in  Kemble 
v.  Lake  Shore  (j-  Michigan  Southern  R.  Co.,  3  Inters.  Com.  Rep.  830,  5  I.  C.  C. 
Rep.  166.  "Whether,  as  matter  of  fact,  the  domestic  rate  to  Boston  is  unrea- 
sonably high,  or  whether  the  export  rate  through  Boston  unduly  discriminates 
against  Boston,  are  questions  which  were  involved  in  cases  heretofore  decided 
by  the  Commission;  and  their  reconsideration  in  this  case  is  not  warranted  by 
any  facts  developed  at  the  hearing.  Held,  That  the  fourth  section  is  not  vio- 
lated by  the  lower  export  rate  to  East  Boston  than  the  domestic  rate  for  the 
shorter  distance  to  Boston,  and  that  the  petition  should  l>e  dismissed. 

233 


234  ATLANTIC    PORT   DIFFERENTIALS 

Edward  Kemble  for  complainant  in  person. 
George  C.  Greene  for  L.  S.  &  M.  S.  Ry.  Co. 
Frank  Loomis  for  N.  Y.  C.  &  H.  R.  R.  R.  Co. 
Samuel  Roar  for  B.  &  A.  R.  R.  Co. 

REPORT  OF  THE  COMMISSION. 

Prouty,  Commissioner: 

The  defendants  in  this  proceeding,  the  Lake  Shore  &  Michigan 
Southern  Railway  Company,  the  New  York  Central  &  Hudson  River 
Railroad  Company,  and  the  Boston  &  Albany  Railroad  Company,  con- 
stitute a  through  line  for  the  transportation  of  merchandise  from  Chi- 
cago to  Boston.  The  two  first-named  defendants  constitute  another 
through  line  from  Chicago  to  New  York.  The  lines  are  identical  from 
Chicago  to  Albany,  N.  Y.,  where  they  diverge,  the  route  from  there  to 
New  York  being  by  the  New  York  Central  &  Hudson  River  Railroad, 
and  to  Boston  by  the  Boston  &  Albany  Railroad. 

The  Lake  Shore  &  Michigan  Southern  Railway  Company  and  the 
New  York  Central  &  Hudson  River  Railroad  Company  are  parties  to 
joint  tariffs  from  Chicago  to  New  York,  and  the  three  defendants  pub- 
lish joint  tariffs  from  Chicago  to  Boston.  By  these  tariffs  the  rate  on 
grain  and  sixth-class  merchandise  is  2  cents  per  hundred  pounds  higher 
from  Chicago  to  Boston  than  from  Chicago  to  New  York  when  such 
merchandise  is  for  domestic  consumption ;  but  if  intended  ' '  for  ex- 
port" the  rate  to  Boston  and  New  York  is  the  same;  that  is,  the  de- 
fendants make  two  rates  to  Boston,  one  if  the  commodity  is  for  local 
consumption,  which  is  2  cents  above  the  New  York  rate,  and  another  if 
the  commodity  is  for  export,  which  is  the  same  as  the  New  York  rate. 
The  lawfulness  of  this  practice  is  attacked  by  the  complaint. 

[112]  The  defendants  insisted  in  their  answers  and  upon  the  hear- 
ing that  the  question  thus  presented  had  already  been  considered  and 
decided  by  the  Conunission,  and  that  this  decision,  if  not  a  technical 
estoppel,  ought  to  be  controlling  of  the  present  controversy. 

This  claim  of  the  defendants  is  hardly  warranted  by  the  facts.  The 
question  of  relative  rates  from  Chicago,  which  may  be  taken  in  this 
discussion  as  representative  of  western  points  generally,  to  New  York 
and  Boston,  has  been,  first  and  last,  the  subject  of  much  contention. 
Previous  to  1870  all  merchandise  transported  to  Boston,  whether  for 
export  or  domestic  consumption,  took  a  higher  rate  than  the  corre- 
sponding New  York  rate.  The  ocean  rate  from  Boston  and  New  York 
to  foreign  ports  was  substantially  the  same.  If,  therefore,  the  inland 
rate  to  Boston  was  higher  than  to  New  York  it  resulted  that  the  through 
rate  to  the  foreign  port  was  correspondingly  greater,  with  the  further 


KEMBLE  V.  B.  &  A.   R.   R.   CO.,  ET  AL.  235 

result  that  export  merchandise  would  move  by  the  clieaper  route 
through  New  York,  rather  than  by  the  more  expensive  one  through 
Boston.  For  the  purpose  of  placing  these  two  ports  upon  an  equality 
in  the  matter  of  the  export  rate,  an  agreement  was  made  between  the 
carriers  serving  them,  in  1870,  by  which  merchandise  for  export  was 
given  the  same  rate  to  Boston  as  to  New  York,  although  domestic  mer- 
chandise still  paid  the  higher  rate  to  Boston. 

It  would  appear  that  under  this  arrangement  all  traffic  was  billed  to 
Boston  at  the  higher  rate,  but  that  the  carrier  refunded  to  the  shipper 
the  difference  between  the  New  York  and  Boston  rate  upon  whatever 
was  subsequently  exported.  When  the  Interstate  Commerce  Act  took 
effect  in  1887,  certain  of  the  carriers  who  had  become  parties  to  and 
were  then  participating  in  this  arrangement  conceived  that  it  was  for- 
bidden by  that  Act,  and  declined  to  further  continue  it.  Thereupon, 
the  Fitchburg  Railroad  Company,  the  Boston  &  Albany  Railroad  Com- 
pany, and  some  other  railroads  which  were  interested  in  the  export 
trade  at  Boston,  applied  to  the  Commission  by  petition  for  leave  to 
continue  the  payment  of  this  rebate.  This  proceeding  is  entitled  In 
the  Matter  of  the  Export  Trade  of  Boston,  1  I.  C.  C.  Rep.  24,  1  Inters. 
Com.  Rep.  25  {ante,  p.  105).  Upon  final  hearing  the  petitioners  them- 
selves concluded  that  the  Commission  had  no  power  to  grant  the  relief 
prayed  for,  and  leave  was  given  to  withdraw  their  several  petitions. 
In  disposing  of  the  matter,  Cooley,  [113]  Chairman,  intimated  that  the 
practice  referred  to  was  not  in  violation  of  the  Interstate  Commerce 
Act,  but  from  the  very  nature  of  the  case  no  decision  could  be  made. 

In  1887  the  Boston  domestic  rate  upon  sixth-class  merchandise  and 
grain  was  5  cents  per  hundred  pounds  higher  than  the  New  York  rate ; 
and  one  of  the  first  proceedings  instituted  before  the  Interstate  Com- 
merce Commission  had  for  its  purpose  the  abolishing  of  this  differ- 
ential. In  this  case,  Boston  Chamber  of  Commerce  v.  Lake  Shore  rf' 
Michigan  Southern  Baihvay  Company  and  Others,  1  I.  C.  C.  Rep.  436, 
1  Inters.  Com.  Rep.  754  {ante,  p.  Ill),  the  entire  subject  of  these  differ- 
entials was  gone  into,  much  testimony  was  taken,  exhaustive  arguments 
were  made,  and  the  case  carefully  considered.  A  decision  was  pro- 
mulgated in  February,  1888,  which  was  to  the  effect  that  conditions 
justified  a  higher  rate  to  Boston  than  to  New  York,  and  that  the  exist- 
ing differential  should  not  be  disturbed. 

In  January,  1890,  another  complaint  was  filed  which  attacked  this 
same  differential.  In  this  case,  Edward  Kemble  v.  Lake  Shore  &  Mich- 
igan Southern  Railway  Company  and  Others,  5  I.  C.  C.  Rep.  16fi,  3 
Inters.  Com.  Rep.  830  {ante,  p.  137),  the  whole  subject  was  again  fully 
considered,  and  a  decision  promulgated  in  April,  1892.     By  this  deei- 


236  ATLANTIC    PORT   DIFFERENTIALS 

sion  the  Commission  in  a  measure  reconsidered  its  earlier  conclusion, 
holding  that  the  differential  against  Boston  should  not  be  an  arbitrary 
one,  but  that  the  Boston  rate  should  not  exceed  110  per  cent,  of  the 
New  York  rate.  This  conclusion  was  substantially  accepted  by  the 
carriers,  and  had  the  effect  to  reduce  the  differential  against  Boston 
upon  grain  and  sixth-class  merchandise  from  5  cents  per  hundred 
pounds  to  2  cents  per  hundred  pounds,  as  it  has  ever  since  been  and 
now  is. 

At  the  time  both  these  cases  were  heard  and  decided  the  Boston  ex- 
port rate  was  the  same  as  the  New  York  rate,  and  differed,  as  it  now 
does,  from  the  domestic  rate.  This  fact  was  fully  developed  upon  both 
hearings,  and  was  earnestly  pressed  upon  the  attention  of  the  Com- 
mission as  a  reason  why  the  carriers  ought  not  to  charge  a  higher  local 
rate  to  Boston  than  to  New  York ;  but  in  each  case  the  complainant 
expressly  stated  that  it  did  not  desire  to  disturb  or  question  the  export 
rate,  its  complaint  being  directed  solely  to  the  unreasonableness  of  the 
local  rate ;  and  the  Commission  in  delivering  its  opinion  in  both  cases, 
while  refer-  [114]  ring  to  the  fact  that  these  two  rates  existed,  express- 
ly stated  that  it  did  not  consider  either  the  propriety  or  legality  of  that 
practice. 

It  can  hardly  be  said,  therefore,  that  this  question  is  res  judicata. 
It  was  in  terms  excepted  from  consideration  in  the  last  two  cases,  and 
could  not  have  been  decided  in  the  first  case  above  referred  to.  While, 
however,  the  question  itself  has  never  been  passed  upon,  the  principle 
which  must  control  its  disposition  is  no  longer  matter  for  discussion. 
The  subject  of  export  and  import  rates,  and  the  relation  which  should 
exist  between  the  inland  division  of  such  rates,  and  rates  upon  corre- 
sponding traffic  when  intended  for  domestic  consumption,  is  an  im- 
portant one,  and  early  received  the  attention  of  the  Conmiission. 

On  March  8,  1888,  the  Commission,  having  under  consideration  the 
subject  of  tariffs  on  export  freight,  promulgated  a  general  order,  di- 
recting, among  other  things,  that  carriers  engaged  in  the  transporta- 
tion of  merchandise  for  export  should,  in  case  such  merchandise  was 
taken  upon  a  through  rate  to  the  foreign  port,  indicate,  not  onlj^  the 
entire  rate,  but  the  inland  division  which  the  carrier  received,  and 
that  where  the  through  rate,  by  reason  of  fluctuation  of  the  ocean  rate, 
could  not  be  known,  the  carrier  should  specif}^  by  its  tariff  the  inland 
rate  which  it  received. 

Subsequently  this  matter  of  export  rates  was  brought  to  the  atten- 
tion of  the  Commission  in  the  case  of  New  York  Produce  Exchange  v. 
New  York  Central  &  E.  R.  Railroad  Company  and  Others,  3  I.  C.  C. 
Rep.  138,  2  Inters.  Com.  Rep.  553.     In  that  case  it  was  alleged  and  ap- 


KEMBLE  V.  B.  (fe   A.    R.   R.   CO.,  ET   AL.  237 

peared  in  proof  that  the  defendant  carriers  made  rates  from  interior 
points  in  the  United  States  to  varions  foreign  ports  throngh  the  port 
of  New  York,  under  which  their  division  was  less  than  the  rate  charged 
for  the  transportation  of  similar  merchandise  from  the  inland  points 
to  New  York.  This  was  alleged  to  be  in  violation  of  the  Act  to  Regu- 
late Commerce,  as  an  unjust  discrimination  against  the  port  of  New 
York.  The  facts  involved  in  this  proceeding  were  fully  developed,  and 
the  questions  raised  elaborately  discussed  and  carefully  considered. 
The  decision  of  the  Commission,  promulgated  June  19,  1889,  was  that 
the  practical  way  of  making  export  rates  was  by  adding  the  fluctuat- 
ing ocean  rate  to  a  fixed  inland  rate;  that  the  inland  rate  when  ap- 
plied to  export  traffic  should  not  discriminate  against  traffic  for  do- 
mestic consumption,  "unless  justifiable  conditions  existed  for  a  dif- 
ference;" that  no  such  conditions  were  [115]  shown  to  exist  at  New 
York ;  and  therefore  that  the  inland  rate  for  export  and  for  domestic 
consumption  must  be  the  same  at  that  port.  While  this  case  holds  that 
ordinarily  the  inland  rate  should  be  the  same  upon  domestic  and  export 
traffic,  it  intimates  that  conditions  might  justify  a  difference. 

March  23,  1889,  the  Commission,  having  under  consideration  the  sub- 
ject of  import  traffic,  made  a  general  order  that  all  imported  traffic 
should  be  transported  from  the  port  of  entry  to  the  interior  point  of 
destination  upon  the  same  tariff  applied  to  domestic  freight. 

In  the  case,  New  York  Board  of  Trade  &  Transportation  v.  Penn- 
sylvania Railroad  Company  and  Others,  4  I.  C.  C.  Rep.  447,  3  Inters. 
Com.  Rep.  417,  the  question  of  import  rates  as  affected  by  this  order 
came  under  consideration.  It  appeared  in  that  case  that  various  rail- 
way carriers  in  the  United  States  were  accustomed  to  make  joint 
through  rates  from  foreign  ports  to  different  points  in  the  interior  of 
the  United  States,  under  which  the  division  received  by  the  railway 
for  its  portion  of  the  service  was  much,  and  often  very  much,  less  than 
the  charge  made  for  a  corresponding  service  from  the  port  of  entry  to 
the  interior  point.  Thus,  the  Pennsylvania  Railroad  Company,  in  con- 
nection with  some  steamship  line,  would  transport  tin  plate  from  Liver- 
pool to  Chicago  through  Philadelphia  upon  a  through  rate  of  24  cents 
per  hundred  pounds,  of  which  it  received  for  its  service  from  Philadel- 
phia to  Chicago  16  cents  per  hundred  pounds,  when  its  regular  tariff 
for  the  transportation  of  tin  plate  originating  at  Philadelphia  from 
Philadelphia  to  Chicago  was  26  cents.  This  case,  like  the  export  case 
previously  referred  to,  was  fully  considered  both  upon  the  facts  and 
upon  the  law.  A  decision  was  announced  January  29,  1891,  by  which 
the  practice  complained  of  was  declared  to  be  illegal.  The  defendant 
carriers  had  sought  to  justify  the  making  of  such  through  rates  upon 


238  ATLANTIC    PORT   DIFFERENTIALS 

the  ground  that  competitive  conditions  demanded  it,  and  that  they 
must  take  the  traffic  at  such  rates  or  abandon  it  altogether.  It  was 
said  by  the  Commission  that  these  competitive  conditions,  so  far  as  they 
existed  abroad,  could  not  be  considered  by  it;  that  the  Interstate 
Commerce  Act  applied  to  the  regulation  of  commerce  only  within  the 
territorial  limits  of  the  United  States,  and  that  the  conditions  existing 
beyond  those  limits  could  not  be  taken  into  account;  that  when  mer- 
chandise arrived  at  a  port  of  entry  it  thereupon  [116]  became,  for  the 
first  time,  subject  to  the  operation  of  the  Act,  and  must  be  treated  as 
though  it  had  originated  at  that  point.  It  followed  that  the  rate  ap- 
plied to  such  merchandise  must  be  the  same  as  the  rate  applied  to 
similar  merchandise  originating  at  the  port  of  entry;  or,  otherwise 
stated,  that  the  division  received  by  the  carrier  for  the  inland  trans- 
portation of  imported  merchandise  must  be  in  all  cases  the  same  that 
was  charged  for  the  transportation  of  a  like  kind  of  merchandise 
originating  at  the  port  of  entry. 

It  will  be  noticed  that,  while  the  export  case  was  considered  and  de- 
cided as  a  question  of  fact,  the  later  import  case  was  decided  as  a  mat- 
ter of  law.  In  the  export  case  it  was  intimated  that  conditions  abroad 
might  justify  one  inland  rate  for  export  and  another  for  domestic 
traffic ;  but  in  the  import  case  it  was  finally  held  that  these  conditions, 
if  they  existed,  could  not  be  considered.  There  is  probably  no  sound 
distinction  between  import  and  export  traffic,  and  the  later  case  must 
be  taken  as  expressing  the  final  opinion  of  the  Commission  as  applied 
to  both  kinds  of  traffic.  If  the  carrier  must  in  all  cases,  as  a  matter  of 
law,  charge  the  same  inland  rate  upon  imports  as  is  charged  upon 
domestic  traffic,  then  it  would  follow  that  in  all  cases,  as  matter  of  law, 
the  same  rate  must  be  charged  upon  export  traffic  to  the  port  of  export 
as  is  charged  upon  similar  domestic  traffic  to  that  point.  If  this  view 
of  the  Commission  had  finally  prevailed,  the  contention  of  the  com- 
plainant in  the  present  case  would  be  well  taken,  for  the  defendant 
carriers  could  not  then  maintain  one  rate  when  merchandise  was  in- 
tended for  domestic  consumption,  and  another  rate  when  it  was  in- 
tended for  export. 

That  view  has  not,  however,  finally  prevailed,  but  a  different  inter- 
pretation has  been  put  upon  the  Act  to  Regulate  Commerce,  in  that 
respect,  by  the  Supreme  Court  of  the  United  States  in  Texas  &  Pacific 
Railway  Co.  v.  Interstate  Commerce  Commission,  162  U.  S.  197,  40  L. 
ed.  940,  5  Inters.  Com.  Rep.  405. 

The  Texas  &  Pacific  Railway  Company  made  in  1892  through  rates 
from  Liverpool  and  other  foreign  ports  to  San  Francisco,  Cal.,  the  car- 
riage being  by  steamship  from  Liverpool  to  New  Orleans,  and  by  rail- 


KEMBLE  V.  B.  &  A.   R.  R.   CO.,  ET  AL.  239 

way  over  the  lines  of  the  Texas  &  Pacific  Company,  in  connection  with 
those  of  the  Sonthern  Pacific  Company,  to  San  Francisco.  The  amonnt 
of  these  through  rates  was  less,  sometimes  not  more  than  one-third  of 
the  rates  charged  by  [117]  the  Texas  &  Pacific  Company  for  transport- 
ing similar  traffic  from  New  Orleans  to  San  Francisco.  It  might  hap- 
pen that  for  earrjung  the  same  merchandise  in  the  same  car  from  New 
Orleans  to  San  Francisco  the  rail  carrier  wonld  not  receive  more  than 
one-sixth  as  much  when  the  merchandise  was  imporled  throngh  the 
port  of  New  Orleans  as  if  it  had  originated  or  been  manufactured  at 
that  point.  The  reason  for  this  was  alleged  to  be  that  the  through 
rate  from  Liverpool  to  San  Francisco  was  determined  by  the  price  of 
transportation  either  by  sailing  vessel  around  Cape  Horn,  in  the  case 
of  certain  kinds  of  commodities,  or  by  steamship  and  rail  across  the 
Isthnms  of  Panama,  in  the  case  of  other  commodities.  The  Texas  & 
Pacific  insisted  that  these  through  rates  were  absolutely  fixed,  and  that 
it  must  either  take  the  traffic  at  that  figure  or  abandon  it  altogether. 

This  condition  of  things  had  been  developed  in  the  ease  of  New  York 
Board  of  Trade  &  Transportation  v.  Pennsi/Ivania  Railroad  Company 
above  referred  to,  and  the  Commission  had  ordered  the  Texas  &  Pacific 
Compan^^  not  to  transport  imported  merchandise  at  any  other  or  dif- 
ferent rate  than  it  charged  for  transporting  the  same  kind  of  domestic 
merchandise  from  New  Orleans  to  San  Francisco.  This  order  the 
Texas  &  Pacific  had  declined  to  obey,  and  thereupon  the  proceedings 
were  begun  to  compel  a  compliance  with  such  order,  which  finally  re- 
sulted in  the  case  coming  before  the  Supreme  Court  of  the  United 
States. 

It  will  be  remembered  that  the  Commission  had  based  its  decision 
and  order  upon  the  assumption  that  under  the  Act  to  Regulate  Com- 
merce conditions  at  the  foreign  port  could  not  be  considered,  and  that, 
as  matter  of  law,  the  inland  rate  on  imported  and  domestic  traffic  must 
be  the  same. 

The  Supreme  Court  held  that  conditions  abroad  as  well  as  conditions 
existing  in  the  United  States  should  be  considered;  that  the  interest 
of  the  carrier  and  the  consuming  community  as  well  as  the  producing 
community  must  be  taken  into  account ;  and  that  there  was  no  hard 
and  fast  rule  which  prohibited  the  carrier,  in  furtherance  of  its  own 
interests  and  the  interests  of  its  patrons,  from  accepting  a  less  sum  for 
the  transportation  of  imported  merchandise  from  the  port  of  entry  to 
an  interior  point  than  it  charged  for  the  transportation  of  domestic 
merchandise  between  the  same  points.  To  apply  the  decision  to  the 
exact  case  before  the  court,  there  was  nothing  in  the  Act  to  Regulate 
Commerce  [118]  which,  as  matter  of  law,  prohibited  the  Texas  &  Pa- 


240  ATLANTIC   PORT   DIFFERENTIALS 

cific  Railway  Company  from  participating  in  a  through  rate  from 
Liverpool  to  San  Francisco  via  New  Orleans,  which  was  one-third  the 
rail  rate  from  New  Orleans  to  San  Francisco,  and  of  which  its  division 
must  be  materially  less  than  the  whole  rate.  From  this  decision  it  must 
follow  that  carriers  are  not  prohibited  from  making  rates  from  points 
in  the  United  States  to  points  in  foreign  countries,  or  from  points  in 
foreign  countries  to  points  in  the  United  States,  of  which  the  inland 
division  is  less  than  the  tariff  rate  for  the  transportation  of  similar 
commodities  when  intended  for  local  domestic  consumption. 

This  being  the  law,  what  are  the  practical  conditions  that  give  rise 
to  the  two  rates  in  question  ?  They  can  be  stated  in  a  word.  Taking 
Chicago  as  the  point  of  origin,  Liverpool  as  the  point  of  destination, 
and  grain,  which  is  the  most  important  item  of  export,  as  the  subject 
of  traffic,  it  is  evident  that  grain  can  pass  from  Chicago  to  Liverpool, 
either  through  the  port  of  New  York  or  through  the  port  of  Boston, 
and  that  in  so  doing  it  is  transported  to  such  port  by  rail  and  from 
such  port  by  ship.  It  is  also  evident  that  it  will  choose  the  route  by 
which  it  can  go  the  most  cheaply.  Investigations  in  other  cases  before 
the  Commission  show  that  a  difference  in  the  freight  rate  of  between 
one-fourtli  and  one-eighth  of  a  cent  per  bushel  determines  the  route 
by  which  grain  shall  be  exported.  Now,  the  ocean  freights  from  Bos- 
ton and  New  York  are  substantially  the  same.  It  follows,  therefore, 
that  the  inland  rate  must  also  be  the  same.  It  lias  been  decided  that 
a  differential  of  substantialh-  2  cents  per  hundred  pounds  may  be 
properly  made  on  domestic  grain  against  Boston,  but  if  the  export  rate 
were  2  cents  higher  to  Boston  than  to  New  York,  no  traffic  would  move 
through  the  port  of  Boston.  The  object  of  these  two  rates,  therefore, 
is  to  equalize  the  export  rate  between  the  ports  of  Boston  and  New 
York.  The  export  rate  to  Boston  is  not  in  reality  a  Boston  rate  at  all, 
but  is  in  essence  the  inland  division  of  a  through  rate  through  that 
port  to  foreign  ports.  That  the  inland  carrier  may  receive  in  such  case 
for  its  division  a  sum  less  than  the  domestic  rate  has  been,  as  we  have 
just  seen,  determined  by  the  Supreme  Court  of  the  United  States; 
hence  the  thing  accomplished  by  the  making  of  these  two  rates  is  not, 
as  a  matter  of  law,  illegal. 

But  if  the  thing  itself  is  not  prohibited,  is  not  this  manner  of  [119] 
'effecting  that  thing  forbidden  ?  Here  is  not  a  through  rate  of  which 
the  inland  division  is  less  than  the  corresponding  domestic  rate,  but 
here  are  two  different  rates  published  and  maintained  to  the  same 
point,  by  which  a  greater  sum  is  charged  for  the  same  service  in  one 
case  than  in  the  other.  Is  not  this  an  unjust  discrimination  or  an 
undue  preference  which  is  forbidden  by  the  Act?     "We  think  that 


KEMBLE  V.  B.  &  A.    R.   R.   CO.,  ET  AL.  241 

under  the  circumstances  of  this  case  it  is  not.  It  is  true  that  the  rate 
in  both  cases  terminates  at  the  port  of  Boston,  but  the  movement  under 
the  export  rate  is  part  of  a  through  movement.  Traffic  to  which  that 
rate  is  applied  is  not  and  cannot  be  Boston  traffic ;  it  merely  passes 
through  Boston  on  its  way  abroad.  When  the  traffic  starts  it  may  not 
be  certain  by  what  agency  it  will  be  carried  from  the  port  of  Boston 
to  its  foreign  destination,  but  it  is  certain  that  it  will  go  there  by  some 
agency.  That  carrier  is  not  subject  to  the  Act  to  Regulate  Connnerce, 
nor  can  the  through  rate  usually  be  determined  and  published  agreea- 
bly to  the  sixth  section,  owing  to  the  fluctuation  in  ocean  rates.  Under 
these  circumstances,  if  the  inland  carrier  publishes  and  maintains  its 
division  of  the  through  rate,  apparenth^  it  does  all  it  can  do,  and  all 
it  is  required  to  do  under  the  Act  which  we  are  administering. 

If  the  inland  rail  carriers,  instead  of  receiving  a  fixed  inland  divi- 
sion, make  through  rates  in  fact  of  which  their  division  fluctuates,  an- 
other question  arises  as  to  the  publication  of  such  rates,  which  is  not 
here  passed  upon. 

This  case  is  not  at  all  that  decided  in  Neiv  York,  New  Haven  d-  Hart- 
ford R.  R.  Co.  V.  Thomas  C.  Piatt  and  Another,  Receivers,  7  Inters. 
Com.  Rep.  323,  where  both  carriers  were  under  the  jurisdiction  of  the 
Act  to  Regulate  Commerce,  and  where  the  petitioner  had  expressly 
refused  to  join  in  the  through  rate  which  the  defendants  were  pub- 
lishing and  under  which  they  were  operating. 

The  decision  of  the  United  States  Supreme  Court  in  Texas  cC-  Pacific 
Railway  Company  v.  Interstate  Commerce  Commission,  supra,  has 
been  understood  in  some  quarters  as  virtually  removing  import  and 
export  traffic  from  the  jurisdiction  of  the  Commission.  Such  is  not  by 
any  means  its  scope  or  effect.  That  decision  simply  broadened  the 
power  of  the  Commission  in  reference  to  such  traffic.  If  any  individual 
or  locality  feels  itself  aggrieved  by  the  rates  made  upon  export  or  im- 
port business  as  compared  with  domestic  business,  the  Commission  has 
full  authority  to  consider  and  pass  upon  that  grievance.  The  pro- 
priety, as  [120]  a  matter  of  fact,  of  the  rates  maintained  by  the  Texas 
&  Pacific  Railway  Company  has  never  been  upheld  by  the  decision  of 
any  tribunal.  It  has  never  been  decided  that  that  company  may  trans- 
port boots  and  shoes  for  the  English  manufacturer  from  New  Orleans 
to  San  Francisco  for  one-sixth  the  amount  charged  the  American 
manufacturer  for  the  same  service,  but  merely  that,  in  determining 
whether  such  rate  constitutes  an  unjust  discrimination  or  an  undue 
preference,  the  interest  of  the  carrier  and  the  consumer  should  be  taken 
into  account  as  well  as  that  of  the  producer. 

In  the  present  case,  merely  the  legality  of  these  two  rates  as  matter 
16 


242  ATLANTIC    PORT   DIFFERENTIALS 

of  law  is  passed  upon.  Whether  as  matter  of  fact  the  domestic  rate  is 
unreasonably  high  either  of  itself  or  in  comparison  with  the  New  York 
rate,  or  whether  the  export  rate  unduly  discriminates  against  Boston, 
has  not  been  considered.  These  questions  of  fact  are  virtually  involved 
in  the  cases  referred  to  in  the  early  part  of  this  opinion.  The  Boston 
export  rate  must  be  the  same  as  the  New  York  export  rate,  and  the 
present  domestic  differential  against  Boston  is  substantially  that  fixed 
by  the  Commission.  This  would  not  probably  prevent  a  review  of 
these  matters  at  any  time,  but  no  facts  were  developed  upon  the  hear- 
ing of  this  case  which  would  warrant  such  reconsideration  here.  The 
petitioner  did  insist,  as  a  matter  of  law,  that  to  charge  two  rates  for 
the  same  service  was  in  contravention  of  the  first,  second  and  third 
sections  of  the  Act  to  Regulate  Commerce,  and  did  thereby  present  a 
new  question  which  had  not  been  decided. 

The  petitioner  also  insisted  that  the  rates  in  question  were  in  viola- 
tion of  the  fourth  section.  The  docks  at  which  this  merchandise  is  de- 
livered by  the  rail  to  the  ocean  carriers  are  at  East  Boston,  and  the 
export  rate  applies  in  fact  to  East  Boston  alone.  East  Boston  is  a 
few  miles  farther  from  Chicago  than  Boston,  and  the  complainant  in- 
sisted that  by  charging  the  higher  domestic  rate  to  Boston  and  the 
lower  export  rate  to  East  Boston  the  defendant  violated  the  fourth 
section. 

The  rate  to  East  Boston  for  domestic  consumption  is  the  same  as  the 
rate  to  Boston.  The  export  rate,  as  we  have  already  seen,  is  essentially 
the  division  of  a  through  export  rate.  It  is  not  made  under  the  same 
circumstances  and  conditions  with  the  domestic  rate  to  Boston,  and  is 
not,  therefore,  within  the  prohibition  of  the  fourth  section. 

For  the  reasons  above  indicated  the  petition  will  be  dismissed. 


DIFFERENTIAL   FREIGHT   RATES   TO   AND   FROM  NORTH 
ATLANTIC  PORTS. 

MEMORANDUM  OF  AUDITOR,  INTERSTATE   COMMERCE  COMMISSION. 


243 


DIFFERENTIAL  FREIGHT  RATES  TO  AND  FROM  NORTH 
ATLANTIC  PORTS. 

INTERSTATE  COMMERCE  COMMISSION, 

auditor's  OFFICE, 

Washington,  D.  C,  May  12,  1904. 

EAST-BOUND,  ALL-RAIL — DOMESTIC   TRAFFIC. 

The  differentials  between  North  Atlantic  ports  on  traffic  originating 
in  the  territory  known  as  Central  Freight  Association  territory,  which 
may  be  described  briefly  as  the  territory  lying  north  of  the  Ohio  and 
east  of  the  Mississippi  Rivers,  east  of  Lake  Michigan,  and  west  of  a 
line  drawn  from  Buffalo,  N.  Y.,  to  Pittsburgh,  Pa.,  are  as  follows: 

The  rates  to  New  York  being  the  basis,  the  rates  to  Philadelphia  are 
2  cents  per  hundred  pounds  and  to  Baltimore,  Newport  News,  and 
Norfolk  3  cents  per  hundred  pounds  less  than  the  rates  to  New  York. 
These  differentials  apply  in  connection  with  all  class  and  commodity 
rates. 

The  rates  on  domestic  traffic  to  Boston,  Mass.,  and  Portland,  Me., 
are  higher  than  New  York  (except  on  live  stock  and  dressed  meats),  as 
follows : 

[In  cents  per  100  pounds.] 


Classes. 

Differ- 
entials. 

Classes. 

Differ- 
entials. 

1 

2  .... 

3  .... 

7 
6 
5 

4  . 

5  . 

6  . 

4 
3 

2 

These  differentials  have  been  in  force  since  August  15,  1892.     Prior 
to  that  date  they  were  as  follows : 

[In  cents  per  100  pounds.] 


Classes. 

Differ- 
entials. 

Classes. 

Differ- 
entials. 

1 

2 

3 

10 
6 
5 

4    

!5    

6    

5 
5 
5 

With  the  exception  indicated  in  the  case  of  Boston  and  Portland 
the  class  differentials  as  above  stated  have  been  in  force  since  the  pas- 


245 


246 


ATLANTIC    PORT    DIFFERENTIALS 


sage  of  the  Act  to  Eegulate  Commerce,  and  also  appear  to  have  been  in 
force  for  about  ten  years  prior  thereto. 

On  live  stock  and  dressed  meats  the  domestic  rates  to  Boston  and 
Portland  are  the  same  as  to  New  York.  With  respect  to  live  stock 
this  basis  has  been  in  use  since  April,  1887,  and  possibly  prior  to  that 
date.  On  dressed  meats  this  appears  to  have  been  adopted  as  a  per- 
manent basis  January  9,  1890.  Prior  to  that  date  the  rates  were  at 
times  the  same,  and  at  other  times  the  differential  higher  than  New 
York. 

Rates  to  Montreal,  Province  of  Quebec,  and  Halifax,  Nova  Scotia,  do 
not  appear  to  be  published  from  all  points  in  the  territory  described, 
and  even  where  published  are  not  in  all  cases  on  the  same  differential 
basis.  It  is  thought,  therefore,  to  be  sufficient  at  this  time  to  state  the 
manner  in  which  the  rates  from  Chicago  to  these  points  have  been 
made. 

From  April  5,  1887,  to  the  present  time  the  class  rates  on  domestic 
traffic  from  Chicago  to  Montreal  have  been  the  same  as  from  Chicago 
to  New  York.  There  is  no  information  at  hand  as  to  the  basis  for 
these  rates  prior  to  the  date  named.  To  Halifax  the  rates  do  not  ap- 
pear at  any  time  to  have  been  made  on  any  regularly  established  dif- 
ferential basis.  From  April  5,  1887,  to  the  present  time  the  rates  from 
Chicago  to  this  point  have  been  higher  than  from  Chicago  to  New 
York,  as  follows : 

[In  cents  per  100  pounds.] 


Classes. 


1. 

2. 
45 

3. 

40 

4. 
45 

5. 
10 

6. 

Apr.  5,  1887,  to  and  including  Jan.  15,  1888  .  . 

65 

10 

Jan.  16,  1888,  to  and  including  Mar.  4,  1888  .  . 

55 

45 

35 

30 

13 

12 

Mar.  5,  1888,  to  and  including  Oct.  21,  1888  . . 

55 

45 

35 

2614 

10 

10 

Oct.  22,  1888,  to  and  including  Dec.  31,  1899  .  . 

40 

30 

24 

19 

13 

10 

Jan.  1,  1900,  to  and  including  present  date  . . 

20 

18 

16 

14 

12 

10 

EAST-BOUND,  ALL-RAIL — EXPORT  TRAFFIC. 

The  differentials  as  between  North  Atlantic  ports  on  east-bound,  all- 
rail  traffic  for  export  are  the  same  as  on  domestic  traffic,  with  the  fol- 
lowing exceptions : 

On  export  traffic  Boston  and  Portland  take  the  same  rates  as  New 
York.  Where  there  are  no  special  export  rates  to  New  York  the  points 
named  take  the  New  York  domestic  rates  on  traffic  exported  through 
those  ports;  but  where  there  is  a  special  export  rate  in  force  to  New 
York,  Boston  and  Portland  take  the  same  rate  on  export  traffic.  This 
basis  has  been  in  force  since  April  5,  1887,  and  was  probably  also  in 


MEMORANDUM  :     DIFFERENTIAL    RATES  247 

force  for  some  time  prior  to  that  date,  though  upon  this  point  there  is 
no  definite  information  available.  On  export  traffic  to  Montreal  the 
rates  have  been  the  same  as  to  Philadelphia  (except  as  indicated  below) 
since  December  17,  1888.  Prior  to  that  date  there  appears  to  have  been 
no  provision  for  special  export  rates  to  Montreal  on  regular  classified 
traffic.  On  grain  and  grain  products  the  bases  for  export  rates  to  this 
point  have  been  as  follows : 

From  April  1887,  to  June  1,  1901,  same  as  Philadelphia;  from  last- 
named  date  to  October  21,  1901,  same  as  New  York,  and  from  October 
21,  1901,  to  present  date  same  as  Philadelphia. 

As  will  be  seen,  with  the  exception  of  a  few  months  in  the  year  1901, 
the  basis  for  export  rates  to  this  point  has  been  the  same  as  to  Philadel- 
phia, 

Prior  to  May  11,  1903,  there  appear  to  have  been  no  special  export 
rates  on  traffic  of  any  description  to  Halifax,  On  the  date  mentioned 
the  rate  on  grain  and  grain  products  from  Chicago  and  Chicago  junc- 
tion points  to  Halifax  for  export  was  made  1  cent  per  hundred  pounds 
higher  than  New  York,  which  is  the  present  basis. 

On  or  about  February'  1,  1899,  special  differentials  were  adopted  to 
apply  on  export  grain  (onl^O  to  Philadelphia,  Baltimore,  Newport 
News,  and  Norfolk,  These  differentials  were  just  one-half  the  regular 
differentials,  being  as  follows : 

To  Philadelphia  1  cent,  and  to  Baltimore,  Newport  News,  and  Nor- 
folk 11/2  cents  less  than  New  York;  Boston  and  Portland  taking  the 
New  York  export  rate.  These  special  differentials  are  still  applied  on 
grain  exported  through  the  ports  named.  It  should  be  stated  that 
since  May  2,  1902,  there  have  been  two  export  rates  on  grain  from  the 
territory  above  described  to  the  North  Atlantic  ports.  The  first  or 
higher  rate  applies  when  the  grain  is  billed  to  the  port  for  export. 
The  second  or  lower  rate  applies  only  when  the  grain  is  consigned  to 
a  foreign  port,  or  to  the  care  of  a  foreign  freight  agent  at  the  port  of 
export,  or  so  consigned  as  to  secure  delivery  at  shipside,  or  to  elevators 
or  warehouses  at  tide  water  having  facilities  for  export.  It  is  only  in 
connection  with  this  lower  export  rate  that  the  special  differentials 
apply, 

WEST-BOUND,  ALL-RAIL DOMESTIC  TRAFFIC, 

On  west-bound,  all-rail,  domestic  traffic  from  North  Atlantic  ports 
to  the  territory  before  described  Boston  and  Portland  take  the  same 
rates  as  New  York,  while  from  Philadelphia  the  rates  are  the  following 
differentials  less  than  New  York : 


248 


ATLANTIC    PORT   DIPPERENTIALS 
[In  cents  per  100  pounds.] 


Classes. 

Differ- 
entials. 

Classes. 

Differ- 
entials. 

1 

6 
6 

2 

4    

2 

2  ... 

3  .  .. 

5  .  .. 

6  ... 

2 
2 

The  rates  from  Baltimore,  Newport  News,  and  Norfolk  to  the  same 
territory  are  lower  than  New  York,  as  follows  : 

[In  cents  per  100  pounds.] 


Classes. 

Differ- 
entials. 

Classes. 

Differ- 
entials. 

1 

2 

8 
8 
3 

4    

5    

6    

3 
3 

3 

3 

These  differentials  have  been  in  force  since  the  passage  of  the  Act  to 
Regulate  Commerce,  and  probably  for  a  number  of  years  prior  thereto, 
though  upon  this  point  there  is  no  definite  information  in  the  posses- 
sion of  the  Commission. 

From  Montreal  the  rates  appear  to  have  been  for  many  years  the 
following  differentials  below  New  York : 

[In  cents  per  100  pounds.] 


Classes. 

Differ- 
entials. 

Classes. 

Differ- 
entials. 

1 

10 
8 
6 

4    

5    

6    

4 

2 

3 

4 
3 

From  Halifax  there  appear  to  have  been  no  established  differentials 
above  the  New  York  or  Boston  rates.  On  April  5,  1887,  the  rates  from 
Halifax  to  Chicago  were  the  following  figures  higher  than  the  rates 
from  New  York  and  Boston  : 

[In  cents  per  100  pounds.] 


Classes. 

Differ- 
entials. 

Classes. 

Differ- 
entials. 

1 

2 

3 

45 
35 
30 

4    

5    

6   

25 
10 
10 

Since  December  11,  1899,  the  rates  from  this  point  to  Chicago  have 
been :  On  classes  1,  2,  and  3  respectively  11,  9,  and  3i/^  cents  less  than 


MEMORANDUM  :     DIFFERENTIAL   RATES  249 

New  York,  while  on  classes  4  and  5  they  have  been  one-half  cent  per 
hundred  pounds  higher,  and  on  class  6  the  same  as  New  York. 

WEST-BOUND,  ALL-RAIL — IMPORT  TRAFFIC, 

At  the  present  time  the  lines  operating  from  North  Atlantic  ports 
publish  and  file  rates  applying  on  import  traffic.  These  rates  are,  in 
nearly  all  cases,  commodity  rates,  and  so  far  as  it  has  been  practicable 
to  make  comparison  of  these  rates  with  the  domestic  class  rates,  the 
differentials  as  between  the  ports  are  the  same  as  on  domestic  traffic. 

RAIL-AND-LAKE — EAST  AND  WEST  BOUND. 

Where  through  rates  are  published  applying  via  rail-and-lake, 
either  east  or  west  bound,  they  are  made  certain  agreed  differentials 
below  the  all-rail  rates,  and  the  differentials  between  the  ports  are, 
therefore,  the  same  as  on  all-rail  traffic. 

EX-LAKE  RATES  ON  GRAIN  FROM  LAKE  ERIE  PORTS  TO  BOSTON,  NEW  YORK, 
PHILADELPHIA,   AND  B.VLTIMORE. 

It  has  been  the  custom  for  a  number  of  years  past,  of  the  lines  oper- 
ating from  Lake  Erie  ports — Buffalo,  N.  Y.,  Erie,  Pa.,  and  Fairport, 
Ohio — to  make  what  are  termed  "ex-Lake"  rates  from  these  ports  to 
Boston,  New  York,  Philadelphia,  and  Baltimore,  on  grain  reaching 
such  lake  ports  by  water  from  Chicago  and  other  western  points.  The 
grain  is  carried  in  bulk,  and  the  ex-Lake  rates  made  to  apply  thereon 
are  in  cents  per  bushel,  and  where  the  grain  is  for  export  usually 
apply  on  cargo  lots  of  10,000  bushels  of  oats,  and  8,000  bushels  of  other 
grain. 

From  a  comparison  of  these  rates  to  the  several  Atlantic  ports 
named,  on  file  with  the  Commission,  it  appears  that  there  have  been 
no  regularly  established  differentials  as  between  the  Atlantic  ports  on 
this  traffic,  at  least  no  uniform  differentials  have  been  maintained.  At 
times  the  rates  were  the  same  to  all  of  the  ports. 

The  accompanying  tables,  numbered  1  to  7,  inclusive,  show  the  rates 
on  this  traffic  as  published  and  filed  with  the  Commission  by  the  sev- 
eral carriers  operating  from  the  Lake  ports  named,  from  the  earliest 
date  such  tariffs  have  been  filed  to  the  present  time.  In  this  connec- 
tion it  should  be  stated  that  from  an  examination  of  the  tariff's  apply- 
ing on  this  traffic  it  seems  evident  that  all  of  these  ex-Lake  rates  have 
not  been  filed  with  the  Commission.  This  appears  to  be  especially  true 
of  the  rates  to  New  York  for  export.     Tables  numbered  8  to  13,  inelu- 


250 


ATLANTIC    PORT   DIFFERENTIALS 


sive,  show  the  differences  between  the  rates  to  the  Atlantic  ports  named 
on  stated  dates. 

Respectfully  submitted. 

J.  M.  Smith,  Auditor. 


Table  No.  1. 

Statement  showing  changes  in  rates  on  grain,  ex-LaTce,  domestic,  from  Buffalo,  N. 
¥.,  to  Boston,  Mass.,  from  1896,  to  date,  via  New  York  Central  and  Hudson 
Eiver  Railroad. 

DOMESTIC. 
[Rates  in  cents  per  bushel.] 


DATE. 


FROM  BUFFALO,  N.  T.,  TO  BOSTON 

,  MASS. 

-^ 

n 

.o 

<£> 

.Q 

tn 

/-^ 

Ui 

8 

-O 

00 

-.o 

£ 

n 

a 

X 

£ 

a 

"^ 

m 

^ 

03 

o 

>. 

a 

^ 

cq 

O 

W 

O 

TARIFFS. 


1896— Apr.  27  

May  23   

Aug.  3  

Oct.  9 

1897— Apr.  13  

July  12  

Aug.  27  

Sept.  15 

1898— Apr.  11  

1899— Apr.  29   

Nov.  1 

1900— Mar.  5 

Nov.  29 

1901— Apr.  1  

June  1  

Oct.  7 

1902— Apr.  14  

Nov.  15 

1903— Apr.  1  to  date. 


61/2 

SVz 
6% 

61/2 
61/2 

6 
6 

61/2 

7 

7 


61/2 

81/^ 

61/2 
61/2 
61/2 

6 
6 

61/2 

7 
71/2 


MV4. 


7 
5% 

51/2 

5 

5 

5y2 

6 
6 


•r% 


•7% 


t7% 

71/8 
7y2 

7% 

71/2 
5% 

8% 

5% 

5% 

6 

5% 

51/2 

6 

6y2 

6% 


*7% 


t7% 
7% 


7% 

6 

8% 


51/^ 

5% 

6 

61/2 

61/2 


"41/2 


H^k 


41/2 

31/2 

4% 

31/2 

3% 

4 

3% 

4 

4 

414 

41/4 


I.  C.  C.  No. 

97 

S.  1-97 

S.2-97 

S.  3-97 

339 

S.  1-339 

S.  2-339 

S.  3-339 

732 

1100 

1425 

1727 

2201 

2451 

2606 

B.  80 

B.  384 

B.  948 

B.  1402 


I.  C.  c. 

97 

S.  1-97 

S.  2-97 

S.  3-97 

339 

S.  1-339 

S.  2-339 

S.  3-339 

732 

1100 

1425 

1727 

2201 

2451 

2606 

B.  80 

B.  384 

B.948 

B. 1402 


•Expired  December  31,  1896. 


tExpired  January  20,  1898. 


MEMORANDUM  :     DIFFERENTIAL    RATES 


251 


Statement  showing  changes  in  rates  on  grain,  ex-Lake,  for  export,  from  Buffalo,  N. 
Y.,  to  Boston,  Mass.,  from  1897  to  date,  via  New  Yorl;  Central  and  Hudson 
Fdver  Bailroad. 


FOR  EXPORT. 
[Rates  in  cents  per  bushel.] 


DATE. 


FROM  BUFFALO,  N.  Y.,  TO  BOSTON,  MASS. 


In  cargo  lots  of  8,000  bushels. 


Cargo 

lots, 
10,000 
bush- 
els. 


o 

X! 

^^ 

« 

.Q 

(A 

^^ 

J3 

^^ 

00 

J2 

■c 

■^ 

s 

>. 

a 

«o 

cs 

o 

>. 

f^ 

« 

O 

« 

TARIFFS. 


I.  C.  C.  No. 

I.  C.  C.  No. 

1897— Mar.  20 

*5 

♦5 

*4y4 

•4% 

•4% 

*zv-, 

300 

300 

Oct.  20 

*t>% 

♦t5% 

♦+5 

*t5y2 

*t5% 

•t4 

526 

526 

1898— Mar.  15  

*t5 

*t5 

♦14% 

n4% 

*t4% 

*X3Vz 

697 

697 

1899— Apr.  29   

*4 

•3% 

♦314 

1104 
S    1  1104 

*3y2 

S.  1-1104 

S.  3-lKM 

1297 

June   16   . .     .. 

•3 

•314 

S    3-ll(M 

Aug.  18  

Aug.  26  

Oct.  9 

*4 

♦4 

♦3% 

1297 

*3% 

♦3% 

•3% 

♦3 

1331 

1331 

*4 

*4 

♦3% 
♦4 

•3% 
•4 

♦3% 
♦4 

♦sy* 
*3y4 

1384 
1413 

1384 

Oct.  26 

1413 

Nov.  1  

*5 

♦5 

*4y4 

*4y2 

•4y2 

♦3 

1420 

1420 

1900— Mar.  5  

*4 

*4 

♦3'^ 

•3% 

•3% 

♦3 

1726 

1726 

May  10  

*31/2 

♦4 

♦3% 

•3y4 

*3y4 

♦2% 

1881 

1881 

Nov.  16 

•4 

»4 

•3V^ 

♦3% 

♦3% 

•3 

2180 

2180 

Dee.  6 

♦4 

♦41/2 

♦4 

*4 
•3% 

*4y4 

♦3% 

♦4y4 

♦3% 

*3y2 
♦3 

2225 
2497 

2225 

1901-Mar.  30 

2497 

June  1  

*3V2 

♦3V2 

♦3 

*3y4 

*3y4 

♦2y2 

2585 

2585 

July  16  

*3V2 

*sy2 

♦3 

♦sy* 

*3y4 

♦2y2 

2693 

2693 

Aug.  1  

*3% 

♦3% 

♦3% 

*3y2 

♦3% 

*2% 

2703 

2703 

Oct.  1  

*W2 

•3% 

♦4 

♦4 

♦4% 

♦4 

♦4y4 

*3y4 
*3y2 

B.  70 
B.157 

B.  70 

Nov.  18  

B.  157 

1902— June  24  

♦3.9 

♦3.9 

♦3.5 

♦3.7 

•3.7 

♦3.2 

B.  591 

B.  591 

Sept.  1 

*4.5 

*4.5 

♦4 

•4.25 

*4.25 

♦3.5 

B.  754 

B.  754 

1903— Jan.  1  

•5 

*5 

*4% 

♦4% 

*4% 

♦4 

B.  1076 

B.  1076 

Apr.  9  

♦5 

♦51/2 

*4% 

•4% 

•4% 

♦4 

B. 1446 

B.  1446 

Sept.  1.5 

*i 

♦4 

♦SVz 

*3% 

*3% 

♦3 

B.  1946 

B.  1»46 

Nov.  16  

*4V2 

♦iVa 

♦4 

*4y4 

♦4y4 

•3V^ 

B.  2120 

B.  2120 

1904— Jan.  1   

*5 

♦5 

*4y2 

♦4% 

♦4% 

•4 

B.  2220 

B.  2220 

Feb.  8  

*4.6 

*4.6 

♦4.1 

♦4.35 

•4.35 

♦3.6 

B.  2331 

B.  2331 

Feb.  9  

*4.2 

♦4.2 

♦3.7 

♦3.95 

♦3.95 

♦3.2 

S.  1-B.  2331 

S.  1-B.  2331 

Feb.  13  

*3.8 

♦3.8 

♦3.3 

♦3.55 

♦3.55 

♦2.8 

2-B.  2331 

2-B.  2331 

Feb.  13  

*3.4 

♦3.4 

♦2.9 

♦3.15 

♦3.15 

♦2.4 

3-B.  2331 

3-B.  2331 

Feb.  18  

*3 

♦3 

♦2.5 

•2.75 

♦2.75 

♦2 

4-B.  2331 

4-B.  2331 

Feb.  22  

•2.6 

♦2.6 

•2.1 

♦2.35 

•2.35 

♦1.6 

5-B.  2331 

5-B.  2331 

Feb.  27  

♦2.2 

♦2.2 

♦1.7 

♦1.95 

•1.95 

♦1.2 

6-B.  2331 

6-B.  2331 

Mar.  2  

♦1.8 

♦1.8 

♦1.3 

•1.55 

♦1.55 

•0.8 

7-B.  2331 

7-B.  2331 

Mar.  10 

♦1.4 

♦1.4 

•0.9 

•1.15 

*1.15 

•0.4 

8-B.  2331 

8-B.  2331 

Mar.  17  

-1 

♦1 

♦0.5 

♦0.75 

♦0.75 

♦0.4 

9-B.  2331 

9-B.  2331 

Mar.  21  

♦0.6 

♦0.6 

♦0.5 

♦0.35 

♦0.35 

♦0.4 

10-B.  2331 

10-B.  2331 

Mar.  28  

♦0.2 

♦0.2 

♦0.1 

♦0.35 

•0.35 

•0.4 

11-B.  2331 

11-B.  2331 

Apr.  30  to  date 

*4 

♦4 

*3% 

*3% 

*4% 

•3 

12-B.  2331 

12-B.  2331 

•In  cargo  lots  8,000  bushels,  oats  lO.OOO  bushels. 
tExpired  January  15,  1898. 
^Expired  January  15,  1899. 


252 


ATLANTIC    PORT    DIFFERENTIALS 


Statement  showinff  changes  in  rates  on  grain,  ex-Lake,  domestic,  from  Buffalo,  N. 
Y.,  to  New  York,  N.  Y.,  from  1894  to  November  29,  1900,  via  New  York  Cen- 
tral and  Hudson  River  Railroad. 

DOMESTIC. 

[Rates  in  cents  per  bushel.] 


TARIFFS. 


DATE. 


FROM 

BUFFALO,  N. 

T..  TO 

NEW 

rORK, 

N.  Y. 

^^ 

'-^ 

.2 

^_ 

£ 

g 

£ 

.o 

m 

S 

"O 

00 

eo 

£ 

e* 

J3 

e 

o 

^ 

Ph 

P9 

U 

IS 

o 

3894— Apr.  21 
May  15 
May  15 
1895— May  18 
May  18 
tNov.  11 
+Nov.  11 


1896— JMar.  9 
189<>— JMar.  9 

jjune  1 
1899— Apr.  20 

Nov.  1  . 
190O— Mar.  5  . 


7 

*5 

6% 
•5 

6V4 


6% 


5 

6% 

5 


51/2 

My* 
»4y4 


5y2 

My* 


6% 
6 


*4% 
6 

•4% 


*4% 


4% 

6 

4% 


6 

*4% 

6 
•4% 

6 
•4% 


6 

•4% 


41^ 

6 

4% 


Pile  No. 

2892 
2912 
2912 
3272 
3272 
3386 
3386 

I.  O.  C. 

23 

23 

S.  4-23 

1105 

1426 

1728 


1528 
1584 
1534 
1774 
1774 
1870 
1870 

I.  C.  C. 

23 

23 

S.  4  to  23 

1105 

1426 

1728 


♦In  cargo  lots— 10,000  bushels  oats,  8,000  bushels  other  grain. 
tExpired  January  10,  1896. 
tExpired  December  31,  1896. 
Rates  withdrawn  November  29,  1900  (as  per  I.  O.  C.  2,200);    no  rates  published  since  that  date. 


MEMORANDUM  :     DIFFERENTIAL    RATES 


253 


Statement  showinn  chanpes  in  rates  on  prain,  ex-Lake,  domcatie,  from  Buffalo,  N. 
Y.,  to  Philadelphia,  Pa.,  from  1894  to  date,  via  New  York  Central  and  Hudson 
River  Eailroad. 

DOMESTIC. 
[Rates  in  cents  per  bushel.] 


DATE. 


PROM 

BUFFALO,    N. 

Y.,    TO 

PHILADEL- 

PHI  A, 

PA. 

^ 

^ 

.Q 

^^ 

'  ' 

m 

'"^ 

x-v 

£1 

w 

•^^ 

03 

5 

£ 

g 

s 
s 

X 

a 

^^ 

m 

an 

^ 

N 

M 

o 

as 

o 

TARIFFS. 


1894— Apr.  21  

May  15  

May  15 

Oct.  1   

6% 

*4% 
5% 



ey* 

*4y4 

3% 
5 

•3% 
5 

3y2 
*3y2 

f5 

*t3% 

*5 

*:3% 

6y4. 
•4% 
5^ 

ey4 
♦4y4 

5V6 

4y4 
•3% 

4y4 

2892 
2912 
2912 
S.  2-2975 
S.  3-2975 
3191 
3191 
3379 
3379 
3386 
3386 

I.  C.  C.  No. 

23 

23 

S.  2-23 

S.  3-23 

S.  3-23 

S.  4-23 

1105 

1426 

1728 

2200 

s.  1-2200 

S.  2-2200 

26a5 

B.  79 

S.  1-B.  79 

B.  395 

B.  946 

B.  1048 

B.  1403 

B.  1453 

B. 1582 

S.  1-B.  1582 

B.  1979 

B.  2122 

B.  2222 

1-B.  2222 

2-B.  2222 

3-B.  2222 

4-B.  2222 

5-B.  2222 

6-B.  2222 

7-B.  2222 

8-B.  2222 

1528 
1534 
1534 
1575 

Oct.  1  

1575 

1895-Mar.  18 

Mar.  18 

Oct.  28  

Oct.  28   

Nov.  11    

Nov.  11   

1896— Mar.  9   

Mar.  9   

May  15  

*4% 
5% 
4 

♦4 

15% 
*t4% 

*:4 



■■■■js" 

*J5 

•4y4 
5% 

3% 
•3% 

t5y2 
*t4y4 

J5 
*t3% 

*4y4 

3% 

♦3% 

t5y2 

*t4y4 

t5 
*t3% 

*3y4 
4y4 
3y4 
♦sy* 
t4y4 

*t3% 
J4 

*J3y2 

1722 
1722 
1866 
1866 
1870 
1870 

I,  C.  C.  No. 
23 
23 
S.  2-23 

S.  3  23 

S    3-23 

•J3 

2y2 

3 

2y2 

3 

3y4 

3y2 

3 

3y4 

3y2 

3y2 

3y2 

•* 

4 

4  23 

1899— Apr.  30  

Nov.   1   

1900— Mar.  5 

Nov.  29 

Dee.  24 

41/2 

6 

41/2 

4V2 

41/2 

6 

4% 
4% 

4 

sy* 
4 
4 

4 

5% 
4 
4 

4 

5y2 
4 
4 

1105 
1426 
1728 
2200 
S.  1-2200 

1901    Jan    23 

4y4 
4y4 
4% 

4% 
4y4 
4y4 

S    2  2200 

June  1  

Oct.  7  

Dec    7 

4y2 
41/2 

41/2 

4y2 

4 
4 

2605 

B.  79 

S.  1-B.  79 

1902— Apr.  21  

Nov.  15 

1903— Jan.  1  

Apr.  1  

Apr.  9 

May  1 

41/2 
5 

51/2 
51/2 

4% 

5 

5y2 

6 
6 

♦5 
♦6 
*4 

•4y2 

♦5 

•4.6 

*4.2 

*3.8 

*3.4 

•3 

•2.6 

•2.2 

•4 

4 

4% 
5 
5 
5 

4y4 

4% 
5y4 
sy* 

4y4 
4% 
5y4 
5y4 
5y4 

B.  395 
B.  946 
B. 1048 
B.  1403 
B.  1453 
B.  1582 

Sept.  21  

Sept.  28  

Nov   16 



S.  1-B.  1582 

B.  1979 

B.  2122 

1904_jaii.  1 

B.  2222 

Feb.  12      

1-B.  2222 

Feb.  15  

2-B.  2222 

Feb.  15  .   .     .. 

3-B.  2222 

Feb.  19  

4-B.  2222 

Feb    22 

,5-B.  2222 

Feb.  29      ... 

6-B.  2222 

Mar   4 

7-B.  2222 

Apr.  30  to  date 

8-B.  2222 

•In  cargo  lots— oats  10,000,  and  other  grain,  8,000  bushels. 
fExpired  January  10,  1896. 
tExpired  December  31,  1896. 


254 


ATLANTIC    PORT   DIFFERENTIALS 


Statement  showing  changes  in  rates  on  grain,  ex-Lalce,  for  export,  from  Buffalo,  N. 
¥.,  to  Philadelphia,  Pa.,  via  New  YorJc  Central  and  Hudson  River  Railroad. 


FOR  EXPORT. 
[Rates  in  cents  per  bushel.] 


DATE. 


FROM 

BUFFALO,    N. 

Y.,    TO   PHI  LADE  L-   1 

PHIA 

PA. 

^ 

'^ 

.0 

^^ 

S 

/-^ 

m 

,.-^ 

^ 

«e> 

w 

X! 

^ 

t» 

s 

n 

^ 
g 

00 

^ 

;Q 

C3 

>? 

a 

>. 

^ 

0 

es 

>i 

93 

^ 

0 

a 

D3 

0 

TARIFFS. 


1899— May  8  . . 

Nov.  1  . . 
1900— Mar.  13  . 

Aug.  38  . 

Nov.  13  . 

Dec.  6  .. 
1901— Mar.  30  . 

Oct.  11   . 

Nov.  18  . 
1902— June  24 

Sept.  1  . 
1903— Jan.  1  .. 

Apr.  9  . . 

May  4  .. 

Sept.  15 

Nov.  16  . 
1904— Jan.  1  .. 

Feb.  8  . . 

Feb.  9  .. 

Feb.  13  . 

Feb.  13  . 

Feb.  18  . 

Feb.  2a  . 

Feb.  27  . 

Mar.  2  .. 

Mar.  10  . 

Mar.  17  . 

Mar.  21  . 

Mar.  28  . 

Apr.  30  to  <1ate 


*3V2 

*3% 

*2% 

♦2% 

♦3y4 

•2y2 

*t5 

•t5 

*t4y4 

*t4% 

*HV2 

*t3 

41/2 

4% 

4 

4 

4 

2% 

«3 

*3 

*2i^ 

•2% 

♦2% 

♦2 

*4 

*4 

*3y2 

•3% 

♦3% 

♦3 

*4% 

*4y2 

•4 

♦4y4 

♦4y4 

♦3% 

*4 

*4 

*3% 

♦3% 

•3% 

♦3 

♦4V4 

*m 

*3% 

♦4 

♦4 

*3y4 

*W2 

*4% 

*4 

*4y4 

•4y4 

*3y2 

*3.9 

•3.9 

•3.5 

•3.7 

♦3.7 

♦3.2 

•4.5 

*4.5 

•4 

•4.25 

♦4.25 

♦3.5 

*5 

*5 

•4.5 

•4.75 

♦4.75 

♦4 

*5 

•5% 

*4% 

•4% 

♦4% 

♦4 

•5 

*5 

*4y2 

♦4% 

♦4% 

♦4 

♦4 

*4 

•31^ 

♦3% 

*3% 

•3 

*4% 

*4y2 

*4 

*4y4 

•4y4 

♦3% 

•5 

*5 

*4i^ 

♦4% 

•4% 

♦4 

*4.6 

♦4.6 

♦4.1 

♦4.35 

•4.35 

♦3.6 

*4.2 

*4.2 

•3.7 

♦3.95 

•3.95 

♦3.2 

*3.8 

*3.8 

•3.3 

♦3.55 

♦3.55 

♦2.8 

*3.4 

*3.4 

♦2.9 

♦3.15 

♦3.15 

•2.4 

•3 

*3 

♦2.5 

♦2.75 

♦2.75 

•2 

*2.6 

*2.6 

•2.1 

♦2.35 

•2.35 

•1.6 

*2.2 

*2.2 

•1.7 

♦1.95 

•1.95 

•1.2 

*1.8 

*1.8 

•1.3 

♦1.55 

♦1.55 

•0.8 

*1.4 

*1.4 

•0.9 

♦1.15 

•1.15 

♦0.4 

*1 

*1 

♦0.5 

•0.75 

•0.75 

♦0.4 

*0.6 

*0.6 

♦0.5 

♦0.35 

♦0.35 

♦0.4 

*0.2 

*0.2 

♦0.1 

♦0.35 

♦0.35 

•0.4 

»4 

4 

3% 

3% 

3% 

3 

I.  c.  c. 

1108 

1419 

1739 

2029 

2178 

2224 

2496 

B.  83 

B.  158 

B.  592 

B.  755 

B.  1077 

B. 1447 

B.  1.584 

B.  1947 

B.  2121 

B.  2221 

B.  2332 

S.  1-B.  2332 

2-B.  2332 

3-B.  2332 

4-B.  2332 

5-B.  2332 

6-B.  2332 

7-B.  2332 

8-B.  2332 

9-B.  2332 

10-B.  2332 

11-B.  2332 

12-B.  2332 


♦In  cargo  lots— oats  10,000,  other  grain 
fExpires  March  13,  1900. 


.  C.  C. 

1108 

1419 

1739 

2029 

2178 

2224 

2496 

B.  83 

B.  158 

B.  592 

B.  755 

B.  1077 

B. 1447 

B.  1584 

B.  1947 

B. 2121 

B. 2221 

B.  2332 

1-B.  2332 

2-B.  2332 

3-B.  2.'^32 

4-B.  8998 

5-B.  2332 

6-B.  2332 

7-B.  2332 

8-B.  2332 

9-B.  2332 

10-B.  2332 

11-B.  2332 

12-B.  2332 


8,000  bushels. 


Statement  showinfj  chanpes  in  rates  on  prnin,  ex-Lake,  domestic,  from  Buffalo,  N. 
Y.,  to  Baltimore,  Md.,  from  1804  to  November  11,  1S95,  via  New  York  Central 
and  Rudson  Elver  Railroad. 

DOMESTIC. 

[Rates  in  cents  per  bushel.] 


FROM  BUFFALO,  N.  Y.,  TO  BALTIMORE, 
MD. 


TARIFFS. 


1894- 


-May  15 
May  15 
May  24 
May  24 
June  12 
June  12 
-Oct.  28 
Oct.  28 


51/2 

*4y4 
ey* 

*5 

5% 
*4% 

4 

*i 


•4 

6 

*4% 

5y2 
•4y4 
3y2 
*3y2 


5% 
*4 
6 

*4% 

5y2 
*4y4 
3% 

♦4% 


sy* 

syg 

4 

•3% 

6 

4y2 

4% 

*4 

5% 

4y4 

►4y4 

3% 

a% 

3y4 

^3% 

*3y4 

File  No. 

2912 
2912 
2929 
2929 
2975 
2975 
3379 
3379 


1534 
1534 
1543 
1.543 
1575 
1575 
1866 
1866 


*In  cargo  lots,  10,000  oats,  other  grain  8,000  bushels. 
No  rates  in  effect  since  November  11,  1895.    See  File  No.  3386. 

Table  No.  2. 

Statement  showing  changes  in  rate  on  grain,  ex-Lake,  domestic,  from  Buffalo,  N. 
Y.,  to  Boston,  Mass.,  fr&m  1896  to  date,  via  Dela\care,  Lackawanna  and  West- 
ern Bailroad. 

DOMESTIC. 
[Rates  in  cents  per  bushel.] 


FROM  BUFFALO,  N.  Y 

.,  TO  BOSTON 

MASS. 

■^ 

0 

£1 

^^ 

£1 

• 

^ 

,*—, 

to 

.Q 

«i 

^ 

l» 

s 

■o 

2§ 

to 

5 

C3 

tf 

>. 

^-^ 

X 

^ 

a 

(» 

Si 

ca 

tH 

0 

>. 

03 

fN 

« 

Q 

« 

0 

TARIFFS. 


1896— Apr.  29 

May  14  

May  14  

Aug.  4 

Oct.  12  

1897— Apr.  20 

July  12 

Aug.  28 

Sept.  15  

Oct.  30  

1898— Apr.  11  

1899— Jan.  28 

Apr.  29 

May  8 

Nov.  1 

190O— Mar.  8 

Nov.  27 

1901— Apr.  1  

June  1   

Oct.  7  

1902— Apr.  25  

May  14  

Nov.  15 

1903— Jan.  1 

Apr.  1  to  date 


6\i 
6% 


6% 


6 

6% 

7 

7 

7 


7% 


t7y4 

116% 
§6% 

5y2 
5y4 
7 
5y4 


5% 
5 
5 
5 

5% 


7y2 


ma 


7% 
7y8 
7y2 
7% 
n% 
\nv2 
§7% 
5% 
5% 
sy* 
5% 


6 

5% 
5% 
5% 
6 

6y2 

6% 


7% 


7% 
7y8 
7y8 
7y8 
fn/s 
Ii7y2 
§71^ 
6y2 

6 
6 


6 

5% 
5% 
5y2 
6 

6y2 

6% 


4y2 


{4% 

nyz 
§4y2 
syz 
31/2 
4y2 
3y2 
3% 
4 

3% 
4 
4 
4 

4% 
4y4 
4y4 


I.  C.  C.  No. 

1-36 

S.  2-36 

.     S.  2-36 

S.  2-150 

S.  3-150 

.568 

S.  1-620 

S.  2-620 

S.  3-620 

S.  1-766; 

S.  1-9021 

1179 

1227: 

S.  1-1227; 
1364 
1555, 

S.  2-1555; 
1891 
1933 
2028 

S.  1-2163 
2416 
2490 
2594 


I.  C. 


C.  No. 

S.  1-36 

S.  2-36 

S.  2-36 

S.  2-1. ")0 

S.  3-150 

568 

S.  1-620 

S.  2-620 

S.  3-620 

S.  1-766 

S.  1-902 

1179 

1227 

5.  1-1227 

]364 

1555 

3.  2-15.55 

1891 

1933 

2028 

2]a3 

5.  1-2163 

2416 

2490 

2594 


*In  cargo  lots,  oats  10,000,  other  grain  8,000  bushels. 

tRate  expires  September  15,  1896, 

JRates  expired  January  15,  1898. 

§Rates  expire  January  15,  1899. 

Ij  Rates  expire  Aprj)  5.5,  1899. 

'' •    ■    -r  255 


256 


ATLANTIC    PORT   DIFFERENTIALS 


Statement  shoiving  changes  in  rates  on  grain,  ex-Lake,  for  export,  from  Buffalo  to 
Boston,  Mass.,  from  1896  to  date,  via  Delaware,  Lackawanna  and  Western  Rail- 
road. 

FOR  EXPORT. 
[Rates  in  cents  per  bushel.] 


FROM  BUFFALO,  N.  Y.,  TO  BOSTON,  MASS. 

TARIFFS. 

DATE. 

CO 

y. 

i 

05 

a 
0 
0 

0 

d 

d 

1 

E 
0 
0 

6 

-a 

CO 

0 
D3 

1897— Mar.  18 

Apr.  20 

Oct.  20  

1898— Mar.   15   

1899— Jan.  26  

5 

5 
*5% 

41/2 
*5 

4% 
4% 

*5y2 

t4% 
J4% 

4% 
4% 

*5V2 

t4% 
J4% 

31/2 

3% 
»4 
tSVz 

131/2 

I.  C.  C.  No. 

435 
568 
766 
902 
1179 

I.  C.  C.  No. 

4.35 
568 
766 
902 
1179 

*Expires  Jan.   15,   1898. 


fExpires  Jan.   15,   1899. 


tExpires  Apr.  15,   1899. 


Statement  showing  changes  in  rates  on  grain,  ex-Lake,  domestic,  from  Buffalo,  N. 
Y.,  to  New  York,  N.  Y.,  from  1896  to  date,  via  Delaware,  Lackawanna  and 
Western  Railroad. 

DOMESTIC. 
[Rates  in  cents  per  bushel.] 


PROM 

BUFFALO,    N. 

N. 

Y.,    TO 
Y. 

NEW 

YORK, 

TARIFFS. 

^-^ 

o 

s 

^^ 

0 
•A 

£ 

DATE. 

JO 

n 

£1 

^ 

.0 

'a 

s 

■a 

2? 

to 

£ 

^ 

0 

d 

03 

1 

y. 
03 

0 
(-* 

0 

03 

s 

•A 

03 

0 

^ 

n 

0 

w 

0 

0 

K 

I.  C.  C.  No. 

I.  0.  C.  No. 

1896— Mar.  9 

*5 

*iV4, 

•4% 

*4% 

•4 

30 

30 

Mar.  9 

6y4 

51/2 

6 

6 

4y2 

30 

30 

May  14  

May  14  

June  1   

*6 

71/4 

S.  2-36 
S    2-36 

S.  2-36 

S.  2-36 

*5 

*4y4 

«4% 

*4% 

•3y2 

150 

150 

June  1    

6% 



6y2 

6 

6 

4y2 

150 

150 

1897— Apr.  20  

5 



4% 

4% 

4% 

3y2 

568 

568 

Oct.  20  

5% 

5 

5y2 

5y2 

4 

766 

766 

1898— Mar.  15 

5 

4y4 

4% 

4% 

31/^ 

902 

902 

1899— Jan.  26 

5 

4V4 

4% 

4% 

3y2 

1179 

1179 

Apr.  29 

t5 

t4y4 

t4% 

t4y2 

t3 

1227 

1227 

Nov.  1 

61^ 

5% 

6 

6 

syz 

*1364 

1364 

1900— Mar.  8 

5 

4^ 

4% 

4y2 

3 

•1555 

1555 

Nov   27  . 

3y4 

3y2 

S.  2-1555 
*1891 

S.  2-1555 

1901— Apr.  1   

5 

4% 

4y2 

4^ 

1891 

June  18 

5 

4% 

4% 

4% 

sy* 

*1948 

1948 

Oct.  7  

5 

4y4 

4y2 

4y2 

3y2 

•2028 

2028 

1902— Apr   22 

3% 
3% 

S.  5-2028 
♦2163 

S.  5-2028 

Apr.  25  

5 

4y4 

4% 

4y2 

2163 

Nov.  15 

51/2 

4% 

5 

6 

3% 

2416 

2416 

1903— Jan.  1  

6 

5y4 

5% 

5y2 

4 

•2490 

2490 

Apr.  1  to  date 

6 

6>/2 

sy* 

5% 

6% 

4 

•2594 

2594 

tRates  expire  April  15,  1899. 

*In  cargo  lots;    oats,  10.000   other  grain,  8.0O0  bushels. 


MEMORANDUM  :     DIFFERENTIAL    RATES 


257 


statement  showinn  chanqes  in  rates  on  (jroin,  ex-Lahe,  for  export,  from  Buffalo,  N. 
Y.,  to  New  York,  N.  Y.,  from  1896  to  date,  via  Delaware,  Lackawanna  and 
Western  Bfiilroad. 

FOR  EXPORT. 
[Rates  in  cents  per  bushel.] 


FROM  BUFFALO,   N.  Y.,   TO 
N.  T. 

NEW  YORK, 

TARIFFS. 

^ 

d 

O 

A 

^.^ 

^ 

;£ 

tn 

^~N 

..-^ 

DATE. 

Eg 

£ 

^ 

to 

a 

i 

-a 

s 

i 

^ 

« 

o 

6 

a 

1 

1) 

a 

^ 

6 

S5 

■a 

03 

P5 

o 
O 

>< 

03 

O      1 

o 
O 

1S97— Mar.  18   

Oct.  20  

189&— Mar.  15 

1899— Jan.  26  

Nov.  1  

1903— Apr.  1   

May  4  

Sept.  16  

Nov.  16 

1904— Jan.  1  

Feb.  16 

Feb.  24  

Mar.  3 

Mar.  9 

Mar.  14  

Mar.  21  

Mar.  28 

Apr.  30 

Apr.  30  to  date 


5 

5% 
5 
5 

61/2 

5 


4 

41/2 

5 

3.4 

3 

2.2 

1.8 

1.4 

1 

0.6 

0.2 

4 


51/2 

5 

4 

i^A 

5 

3.4 

3 

2.2 

1.8 

1.4 

1 

0.6 

0.2 

4 


4^4 

5 
iV* 

5% 

41/2 


3% 

4 

41/2 

2.9 

2% 

1.7 

1.3 

0.9 

0.5 

0.5 

0.1 

3.5 


4% 
5% 

4% 
4% 
6 
4% 


3% 

414 

4% 

3.15 

2% 

1.95 

1.55 

1.15 

0.75 

0.35 

0.35 

3.75 


4% 

5^/2 

4% 
4% 
6 
4% 


3% 

4% 

4% 

3.15 

2% 

1.95 

1.55 

1.15 

0.75 

0.35 

0.35 

3.75 


3V2 
4 

3% 

3y2 

4 


3 

31/2 

4 

2.4 

2 

1.2 

0.8 

0.4 

0.4 

0.4 

0.4 

3 


I.  C.  C.  No. 

435 

766 

902 

1179 

1364 

S.  A-S.  1-2594 

S.  B-S.  2-2594 

S.  OS.  4-25M 

S.  D-S.  5-2.594 

S.  E-6-2594 

S.  H-8-2594 

S.  1-^2594 

S.  J-10-2594 

S.  K-1 1-2594 

S.L-S.  12-2594 

S.M-S. 13-2594 

S.  N-14-2594 

S.  0-15-2594 

S.  P-16-2594 


I.  C.  C.  No. 

435 

766 

902 

1179 

1364 

S.  A-S.  1-2594 

S.  B-S.  2-25»4 

S.  C-S.4-  2594 

S.  D-S.  .5-2594 


17 


statement  showing  changes  in  rates  on  grain,  ex-Lake,  domestic,  from  Buffalo,  N. 
Y.,  to  Philadelphia,  Pa.,  from  March  9,  1896,  to  date,  via  Delaware,  Lacka- 
wanna and  Western  Railroad. 

DOMESTIC. 
[Rates  in  cents  per  bushel.] 


FROM  BUFFALO,   N.   T.,    TO  PHILADEL- 
PHIA,   PA. 

TARIFFS. 

DATE. 

i 

Si 

£1 

i 

03 

i 

a 

pq 

d 

5 

>> 
03 

m 

S3 
0 

6 

« 
a 

a 
s 
0 
0 

6 
iz; 

•a 

93 

0 

1896— Mar.  9   

Mar.  9   

May  14  

*4 

5% 

*3% 
5 

♦3% 
5 

•3% 
5 

*3% 
4 

I.  C.  C.  No. 
30 
30 

I.  C.  C.  No. 

30 
30 

May  14  

June  1  

June  1  

1897— Mar.  18 

*4 

5V4 

*3% 
5 

*3% 
5 

♦3% 
5 

*3 

4 

150 
150 

150 
150 

Apr.  20  

Oct.  20  

1898— Mar.  15 

1899— Apr.  29 

Nov.  1  

1900— Mar.  8   

Nov.  27    

5 

5% 

5 

4% 

6 

4% 

41/4 
5 

iV4, 

4 

sy* 
4 

4% 
5% 
4% 
4 

5y2 

4 

4% 
5% 
4% 
4 

4 

31/^ 

4 

3% 

2V^ 

3 

2y2 

3 

3y2 

3 

3y4 

3Vi: 

3% 

31^ 

4 

4 

568 

766 

902 

1227 

1364 

1555 

S    2  1555 

568 

766 

902 

1227 

1364 

15,% 

S    2  1555 

1901— Apr.  1  

June  18 

Oct.  7   

Dec.  20  

41/2 

41^ 

iV2 

4 
4 

4 

4y4 
4y4 
4y4 

4y4 
4y4 
4y4 

1891 

1948 

2028 

S    1  2028 

1891 

1948 

2028 

S    1  2028 

1902— Apr.  25 

Nov.  15 

1903— Jan.    1    

Apr.  1  to  date 

5 

51/2 
5% 

e" 

4 

41/^ 

5 

5 

4% 

4%l 

sy*: 
5y4 

4y4 
4% 
5y4 
5y4 

2163 
2416 
2490 

2594 

2163 
2416 
2490 
2594 

*In  cargo  lots,  oats  10,000,  other  grain  8,000  bushels. 

Statement  showing  changes  in  rates  on  grain,  ex-Lake,  for  export,  from  Buffalo, 
N.  Y.,  to  Philadelphia,  Pa.,  from  1896  to  date,  via  Delaware,  Lackawanna  and 
Western  Eailroad. 

FOR  EXPORT. 

[Rates  in  cents  per  bushel.] 


FROM   BUFFALO,    N.   T.,    TO   PHILADEL- 
PHIA,   PA. 

TARIFFS. 

DATE. 

5 
§ 

03 

ID 

y. 

a 

00 

a 

ca 

a 

La 

0 

g 

>> 

0 

6 
:?; 

a 

0 

S 
E 
0 
0 

6 

a 

0 

as 

1896— May  14  

*5 

6y4 
4 

4% 

5 

5 

6 

t3.» 
t3.9 

I.  C.  C.  No. 

S.  2-36 

S.  2-36 

435 

766 

902 

1179 

1364 

S.  2-2163 

S.  3-2163 

I.  C.  C.  No. 

2-36 

May  14      .... 

2-36 

1897— Mar.  18 

Oct.  20  

1898— Mar.  15   

1899— Jan.  26 

Nov.  1 

1902— June  30   

Aug.  1    

4% 

4% 
4% 
5% 
t3.5 
J3.5 

3% 
4% 
4% 
4% 
5% 
t3.7 
13.7 

3% 
4% 
4% 
4% 
5% 
t3.7 
13.7 

3 

3% 
3% 
3VS 
3 

tS.2 
t3.2 

435 

766 

902 

1179 

S.  2-2163 
S.  3-2163 

*In  cargo  lots,  8,000  bushels,  oats  10,000  bushels. 
tRates  expired  July  15,  1902. 
JRates  expired  Aug.  15,  1902. 

258 


MEMORANDUM:     DIFFERENTIAL    RATES 
Table  No.  3. 


259 


Statement  shotting  changes  in   rates  on   grain,  ex-Lake,  from  Buffalo,  N.  Y.,  to 
Boston,  Mass.,  via  Erie  Eailroad. 

DOMESTIC. 
[Rates  in  cents  per  bushel.] 


DATE. 


TARIFF. 


FROM  BUFFALO.  N.  T.,  TO  BOSTON, 
MASS. 


1896— Apr.   21 
May   4    . 
Sept.  IS 
Oct.    8    . 

189S— Apr.  9   . 

1899— Apr.  24 
Apr.  27 
Nov.    1 

190O-Mar.  8   . 
Nov.    27 

1901— Apr.    1    . 
June    1 
Oct.    13 

1902— Apr.  28 
Nov.    15 

1903— Apr.   1    . 


I.  C.  C.  No. 

195 
S.  1-195 
406 
S.  1-406 
1353 
1774 
1775 
1945: 
2200 
2552 
2711 
2817 
2939 
3144 
3229 
3481 


7 
8% 

61/2 

6 
6 

6V2 

7 

7 


61/2 
81/2 

6y2 

6% 

6y2 

6 
6 

6% 

7 

71/2 


7y4 

6% 
5% 

7 

5y4 

514 

5y2 

5 

5 

5V2 

6 
6 


7y2 

6 

5% 

SV4, 

5% 

5% 

6 

5% 

5y2 

6 

6V2 


&V2 

6 

8V4. 


6 

5y2 
5% 

6 

6y2 
6y2 


4y2 

'4% 


4y2 

4 

3y2 

4% 

3y2 

3% 

4 

3% 

4 

4 

4y4 

4% 


FOR  EXPORT. 


1896— Mar.  7 
Mar.  7 
May  4  . 
May  4  . 
June  1 
June  1 

1897— Mar.  16 
Oct..  20 

1898— Mar.  15 
Aug.  29 

1903— Apr.   1 
Sept.  16 
Nov.  16 

1904— Jan.   1 
Feb.   9 
Feb.   15 
Feb.   18 
Feb.  23 
Feb.   27 
Mar.  5 
Mar.  8 
Mar.  15 
Mar.  21 
Mar.  28 
Apr.   2 
Apr.   30 


72 
72 
1-72 
1-72 
271 
271 
705 
10!"i8 
1333 
1486 
348-2 
3679 
3742 
3794 
3852 
3863 
386i 
3877 
3877 
3892 
3901 
3911 
3916 
3925 
3929 
3953 


*5 

ey* 


*5 
6% 
5 
5% 

5 

4y2 

5 

4 

4"^ 

5 

4.6 

3.8 

3.4 

3 

2.6 

2.2 

1.8 

1.4 

1 

0.6 

0.2 

4 


♦6 

7y4 

•6 

7y4 
5 

5% 
5 

5y2 

4 

4y2 

5 

4.6 

3.8 

3.4 

3 

2.6 

2.2 

1.8 

1.4 

1 

0.6 

0.2 

4 


*4% 

5y2 


*4y4 
5y2 
4y4 
5 

4% 
3% 
4y2 
3y2 
4 

4y2 
4.1 
3.3 
2.9 
2.5 
2.1 
1.7 
1.3 
0.9 
0.5 
0.5 
0.1 
3y2 


'4% 


5y2 
4% 
4y4 

4% 

3% 

414 

4% 

4.35 

3.55 

3.15 
2.75 
2.35 
1.95 
1.55 
1.15 
0.75 
0.35 
0.35 
3% 


♦4% 
6 


*4% 
6 
4% 

5y2 

4% 

4y4 

4% 

3% 

4y4 

4% 

4.35 

3.55 

3.15 
2.75 
2.35 
1.95 
1.55 
1.15 
0.75 
0.35 
0.35 
3% 


•4 
4V4 


*3% 
4% 
31^ 
4 

3y2 

3 

4 

3 

3y2 

4 

3.6 

2.8 

2.4 

2 

1.6 

1.2 

0.8 

0.4 

0.4 

0.4 

0.4 

3 


*In  cargo  lots,  oats  10,000,  other  grain  8,000  bushels. 


260 


ATLANTIC    PORT   DIFFERENTIALS 


Statement  showing  charges  in  rates  on  grain,  ex-Lake,  from  Buffalo,  N.  ¥.,  to  New 
York,  N.  Y.,  via  Erie  Bailroad. 

DOMESTIC. 
[Bates  in  cents  per  bushel.] 


DATK. 


TARIFF. 


FROM  BUFFALO,  N.  Y.,  TO  NEW  YORK, 

N.  Y. 


1896— Mar.  7 
Mar.  7 
May  4 
May  i 
.June  1 
.Tune  1 

1897— Mar.  16 
Oct.    2U 

1898— Mar.  15 
Aug.  29 

1899— Apr.  29 
Nov.    1 

1900— Mar.  8 
Nov.  27 
Dec.   24 

1901— Apr.  1 
June  1 
Oct.  14 
Dec.  20 

1902— Apr.  25 
Nov.  15 

1903— Jan.   1 
Apr.   1 
Apr.  23 
May  21 
Sept.  16 
Nov.  16 

1904— Jan.   1 
Feb.   8 
Feb.   15 
Feb.   18 
Feb.   23 
Feb.  27 
Mar.  5 
Mar.  8 
Mar.  15 
Mar.  21 
Mar.  28 
Apr.   2 
Apr.  30 


I.  C.  C.  No. 

72 

72 

S.  1-72 

S.  1-72 

271 

271 

705 

1158 

1333 

1486 

1779 

1944 

2199 

2553 

S.  1-2553 

2712 

2816 

2938 

3014 

S.  2-3014 

3328 

3356 

3479 

3480 

S.  1-3480 

3678 

3741 

3792 

3848 

3860 

3867 

3874 

3885 

3894 

3903 

3910 

3914 

3923 

3980 

3954 


•5 
6V4. 


*5 
6% 
5 

5% 
5 

41/2 
5 

GV2 
5 
5 


5% 
6 


4 


t4 

t4% 

t5 

t4.6 

t3.8 

t3.4 

t3 

t2.6 

t2.2 

tl.8 

tl.4 

tl 

tO.6 

tO.2 

t4 


m 

*6 

5 

5% 

5 

4% 

5 

6% 

5 

5 


5% 

6 

61/2 
iWz 
15 
t4 

t4% 
t5 
t4.6 
t3.8 
t3.4 
t3 

t2.6 
t2.2 
tl.8 
tl.4 
tl 

to. 6 
to. 2 
t4 


•4% 

5V2 


*4% 

414 

5 

4% 

3% 

4% 

5% 

4% 


4% 

4V4 

4V* 


4% 

5V4 

t4% 


t3% 

t4 

t4% 

t4.1 

t3.3 

t2.9 

t2.5 

t2.1 

tl.7 

tl.3 

to. 9 

to. 5 

to.  5 

tO.l 

t31/2 


«4% 
6 

4% 
51/2 
4% 

4V4 

4% 
6 

4% 
4% 


41/2 
4% 
4V4 
4% 


5 

5% 
5% 
t4% 


6 

4% 

51/2 

4% 

414 

4^ 

6 

4% 

4% 


4% 
4% 
4% 
41/2 


5 

51/2 
5% 
t4% 


t3% 

t3% 

t4V4 

t4i4 

t4% 

t4% 

t4.35 

t4.35 

t3.55 

t3.55 

t3.15 

t3.15 

t2.75 

t2.75 

t2.35 

t2.35 

tl.95 

tl.95 

tl.5S 

tl.55 

tl.l" 

tl.l5 

to.  75 

to. 75 

to. 35 

to. 3=; 

to. 35 

to. 3'= 

t3% 

t3y4 

*4 

4% 


•3Vi 
4% 
3% 
4 

3V2 
3 
3 

W2 
3 

3% 
31/2 
3% 
3V4 
SVz 
3 

3% 
3% 
4 
4 

t4 


t3 

t3% 

t4 

t3.6 

t2.8 

t2.4 

t2 

tl.6 

tl.2 

to. 8 

to.  4 

to. 4 

to. 4 

to. 4 

t3 


FOR  EXPORT. 


1807— Oct.    20 

1898— Mar.   15 

Aug.  29 


11.58 

5% 

5% 

5 

51/2 

5% 

1333 

5 

4y4 

4% 

4% 

14S6 

4% 

41/2 

3% 

41/4 

4V4 

4 

31/2 
3 


»In  cargo  lots,  oats  10,000,  other  grain  8,000  bushels. 


tTo  Jersey  City. 


MEMORANDUM  :     DIFFERENTIAL    RATES 


261 


statement  showing  charges  in  rates  on  grain,  ex-Lake,  from  Buffalo,  N.   Y.,  to 
Philadelphia,  Pa.,  via  Erie  Eailroad. 

DOMESTIC. 
[Bates  in  cents  per  bushel.] 


DATE. 


TARIFF. 


FROM  BUFFALO.   N.   Y.,   TO  PHILADEL- 
PHIA.  PA. 


^^ 

w 

/•^ 

o 

CIO 

''■^ 

X! 

VJ 

£1 

a 

to 

a 

o 

>. 

« 

u 

« 

1806— Mar.  7 
Mar.  7 
May  i 
May  4 
May   19 
May   19 
June    1 
June    1 
July   20 
July   20 

1897— Mar.  16 
Oct.  20 

1898— Mar.  15 
Aug.  29 

1899— Apr.  29 
Nov.   1 

1900— Mar.  8 
Nov.  27 
Dec.    24 

19t)l— Jan.  23 
Apr.  1 
June  1 
Oct.  14 
Dec.  20 

1902— Nov.   15 

1903— Jan.   1 
Apr.   1 


C.  C.  No. 
72 

72 

S.  1-72 

S.  1-72 

247 

247 

271 

271 

328 

328 

705 

1158 

1333 

1486 

1779 

1944 

2199 

2553 

S.  1-2553 

S.  2-2553 

2712 

2816 

2938 

3014 

3328 

3356 

3479 


•4 

*i 

5V4 
*4 
5Vi 
5 

5% 
5 

41/2 
4% 
6 

41/2 


6% 
•5 

6% 
•5 

6V4, 
*5 

ev* 

5 

5% 

5 

4y2 

6 


iV2 

5 


4% 

4y2 

4% 

4% 

5 

5% 


*3% 
5 

•3% 
5 

*3% 
5 

4% 
&% 
4% 

4y4 

4 

5y2 

4 

4 


4% 
4% 

4y4 
4y4 
4y4 

4% 

sy* 


•3% 
5 

*3% 

5 
•3% 

5 

4% 

5% 

4% 

4y4 

4 

5% 

4 

4 


*3% 
4 


4 
♦3 

4 
•3 

4 

3% 

4 

3% 

3 

2% 

3 

2% 

3 

3y4 
3% 

31/4 

3 

3V4 

31^ 
3% 
4 
4 


♦In  cargo  lots,  oats  10,000,  other  grain  8,000  bushels. 


262 


ATLANTIC    PORT    DIFFERENTIALS 


Statement  showing   charges  in  rates  on  grain,  ex-Lake,   from  Buffalo,  N.   Y.   to 
Philadelphia,  Pa.,  via  Erie  Bailroad— Continued. 

FOR  EXPORT. 
[Rates  in  cents  per  bushel.] 


DATE. 


TARIFF. 


FROM   BUFFALO.    N.    Y.,    TO   PHILADEL- 
PHIA,   PA. 


1897— Mar.  16 
Oct.  20 

189&-Mar.  15 
Aug.  29 

1902— .Tune  24 
Nov.  22 

1903— Jan.  1 
Mar.  31 
May  21 
Sept.  16 
Nov.  16 

1904— Jan.   1 
Feb.   9 
Feb.   15 
Feb.   18 
Feb.  23 
Feb.  27 
Mar.  5 
Mar.  8 
Mar.  15 
Mar.  21 
Mar.  28 
Apr.   2 
Apr.  30 


S.  3- 
3326 


S.  2- 
S.  3- 


I.  C.  O.  No. 

705 
1158 
1333 
1486 
-3014 
Cor. 
3345 
3345 
;-3S45 
3680 
3743 
3795 
3851 
3862 
3868 
3875 
3886 
3893 
3902 
3908 
3915 
3924 
3928 
3952 


4 

4% 

5 

3.9 

41/2 

5 


4 

41/2 

5 

4.6 

3.8 

3.4 

3 

2.6 

2.2 

1.8 

1.4 

1 

0.6 

0.2 

4 


4 

4% 

5 

4% 

3.9 

41/2 

5 

W2 

5 

4 

4y2 

5 

4.6 

3.8 

3.4 

3 

2.6 

2.2 

1.8 

1.4 

1 

0.6 

0.2 

4 


3% 

41/2 

4% 

3% 

3.5 

4 

4y2 


3y2 

4 

4y2 

4.1 

3.3 

2.9 

2.5 

2.1 

1.7 

1.3 

0.9 

0.5 

0.5 

0.1 

syz 


3% 

3% 

4% 

4y2 

4% 

4% 

4V4 

4y4 

H.7 

3.7 

4y4 

4y4 

4% 

4% 

3% 

3% 

4V4 

4y4 

4% 

i% 

4.35 

4.35 

3.55 

3.55 

3.15 

3.15 

2.75 

2.75 

2.35 

2.35 

1.95 

1.95 

1..55 

1.55 

1.15 

1.15 

0.75 

0.75 

0.35 

03.6 

0.35 

0.35 

3% 

3% 

3 

3y2 

31^ 

3 

3.2 

4 


3 

3% 

4 

3.6 

2.8 

2.4 

2 

1.6 

1.2 

0.8 

0.4 

0.4 

0.4 

0.4 

3 


MEMORANDUM  :     DIFFERENTIAL    RATES 
Table  No.  4. 


263 


statement  shoiving  changes  in  rates  on  grain,  ex-Lake,  from  Buffalo,  N.  Y.,  to  Bos- 
ton, Mass.,  via  Erie  and  Western  Transportation  Company  {Pennsylvania  Rail- 
road Company). 

DOMESTIC. 
[Rates  in  cents  per  bushel.] 


a 
o 

B 
B 
o 
U 

FROM  BUFFALO,   N.   Y.,   TO  BOSTON, 

MASS. 

DATES. 

i 

Si 

£ 

i 

00 

P3 

a 
o 

03 

s 

CO 
0 

d 

si 

File  No. 
18S9— July  22   .'^37 

9V2 
8% 

s% 

8% 
8 

7V^ 
8% 

81/4 

8y4 

8% 

sy* 

8 

71/2 

7 

7% 
7% 
71/2 

61/2 

71/2 

5% 

5% 
5% 
5% 

23 

July  22   

.  350 
366 
368 
382 
390 
391 
402 
403 
417 
441 
475 

24 

Oct.   7       

•30 

Oct.  7    

30 

1890— Apr.  11   

5 

May  12   

5% 
51/8 

11 

May  16   

12 

Aug.    18   

21 

Aug.  23   

'» 

1891— Mar.    19    

8% 

5 

1 

June  7       

19 

1892— Apr.  11   

8%, 

8% 

7i^ 

71/2 

5 

4 

1889— July  22 
Aug.  23 
Sept.  16 
Oct.    7 

1890— Apr.    2 
Apr.    7 
May    12 
June  5 

1891— Mar.  19 
Nov.   6 

1892— Apr.    11 
May  6  . 
May  7  . 
Sept.  20 
Sept.  21 
Sept.  23 
Oct.  17 
Oct.  28 
Nov.   5 
Dec.   4   . 

1893— June  17 
July  5  . 

1894— Mar.   20 

1895— Apr.  11 

1897— Mar.   15 


357 
364 
365 
366 
374 
381 
390 
394 
417 
465 
475 
485 
488 
533 
534 
535 
543 
550 
555 
564 
585 
5S9 
624 
682 

I.  C.  C.  No. 
2 


61/2 
5% 

578 

61/^ 


5% 


5% 
6 

5% 

4% 

41/i 

4% 

4% 

b 

SVz 

6 

7 

6 
5 
5 


6 

5% 

4% 

41/9 

4% 

4% 

5 

5% 

6 

7 

6% 


5% 

5y2 
414 
4y4 
4y2 
4% 
4% 
5% 
5% 

6%' 

6y4, 
5%  I 
51/2; 

4%, 

4%l 


iVi\ 


51/2 

5 

5% 

5% 

3y4 
31/2 

3% 

4y4 

5y4 

5% 

5Vi 

4 

3% 

5% 
5% 

5y2 
4% 
4y4 
4% 
4% 
4% 
5y4 
5% 

6% 

6y4 

6 

5% 
4% 
4% 

4% 

5% 
51/2 
41/2 

4y4 
41/2 

4% 
4% 

sy* 

5% 
6% 

ey* 

6 

5% 
4% 
4% 

4% 

4 

4" 

3% 

3 

3y4 

31/2 

31/2 

4 

41^ 
51/2 
5 

4 
4 

3% 

23 

28 

29 

*30 

2 

3 

11 

15 

1 

39 

4 

11 

14 

39 

40 

41 

46 

52 

56 

64 

6 

9 

2 

1 

I.  C.  C.  No. 
2 


"Corrected. 


264 


ATLANTIC    PORT   DIFFERENTIALS 


Statement  showing  changes  in  rates  on  grain,  ex-Lake,  domestic,  from  Buffalo,  N. 
Y.,  to  New  York,  N.  Y.,  from  1889,  via  Erie  and  Western  Transportation  Co. 

DOMESTIC. 
[Rates  in  cents  per  bushel.] 


DATES. 


03  "^ 


PROM 

BUFFALO,    N. 

Y.,    TO 

NEW 

YORK, 

N.  Y. 

^ 

^ 

B 

^ 

S 

% 

^ 

£i 

s 

^^ 

00 

j= 

to 

CO 

0) 

>1 

a 

J5 

Oj 

o 

>> 

03 

^ 

u 

m 

O 

pj 

o 

188*-July  22 
July  22 
Aug.  23 
Sept.  16 
Oct.   7    . 

1890— Apr.  2  . 
Apr.  7   . 

1891— Mar.  19 
Oct.  14 
Nov.  17 

1892— Apr.  11 
May  6 
May  7 
Sept.  1 
Sept.  2 
Sept.  3 
Sept.  21 
Sept.  23 
Oct.  17 
Oct.  26 
Nov.    5 

189S— Apr.  4  . 
June  17 
July  5   . 

1894— Mar.   20 

1895— Apr.  11 

1897— Mar.   15 


Pile  No. 
357 
359 
364 
365 1 
366: 
374' 
381 
417 
462 
466 
475 
485 
488' 
526 
523 
524 
534 
535 
543 
547 
555 
569 
585 
589 
624 
682 

[.  C.  C.  No. 

2 


6V2 

5% 

578 

6% 


5% 

5% 

6 

5% 

4% 

41/2 


4% 

4% 

5 

51/2 

6 

7 

6 

6% 

6 

5 

5 


5% 
6 

5% 
4% 
4% 


51/2 
6 

7 


41/2 
4% 
4% 
4% 
51/4 
5% 
6% 
51^ 
5% 
51/2 
4% 
4y4 


4% 


51/2 

51/2 

5 

5% 

5% 

51/4 

sy* 
ay* 
5y2 
5% 
5y2 
4y2 
4y4 


4y2 
4y4 

4% 

43/4 
5y4 
5% 

6% 

5% 

6 

5% 
4% 
4% 


4% 


5y2 

5% 

5y2 
4y2 
4y4 


4y2 
4y4 

4% 
4% 

5y4 
5% 

6% 

5% 

6 

5% 

4% 

4% 


4% 


3% 
3% 
3y2 
3% 

4y4 


4 

4 

4 

4 

4 

3V6 

3 

3 


4 

3y2 

3y2 

4 

4y2 

5y2 

4 

4y4 

4 

4 

4 


ayz 


23 

24 

28 

29 

•30 

2 

3 

1 

36 

40 

4 

11 

14 

34 

33 

33 

40 

41 

46 

49 

56 

1 

6 

9 

2 

1 

I.  C.  C.  No. 
2 


EXPORT. 


1897— Mar.    15 


I.  C.  C.  No. 
2 


4y4 


4% 


I.  c.  c. 

3y2  2 


•Oorrected. 


MEMORANDUM  :     DIFFERENTIAL    RATES 
Table  No.  5. 


265 


statement  showincj  rates  on  grain,  ex-Lake,  domestic  and  export,  from  Buffalo,  N. 
Y.,  to  Philadelphia,  Pa.,  from  181)9  to  date,  via  U'csiern  New  ¥ork  and  Penn- 
sylvania Bailroad. 

DOMESTIC. 
[Rates  in  cents  per  bushel.] 


DATE. 


TARIFF. 


FROM  BUFFALO,  N.  Y.,  TO  NEW  YORK, 

N.  Y. 


XI 

w 

j:3 

s 

s 

a 

1^ 

o 

>, 

O 

M 

J90O-NOV.   27   

1901— Mar.  9  

June    1    

Dec.   24    

1902— Jan.   4    

Apr.   21    

Nov.  15  

1903— Jan.  1    

Jan.   10  

Apr.  1   , 

May  12  to  date 


I.  C. 

S. 

s. 


4% 

4% 
4% 
4% 
4y4 
4% 

sy* 

5% 

5V4 

5y4 


4V2 

4y2 

4V2 

iVz 

4y2 

4V^ 

4y2 

41/2 

4% 

4% 

5 

5 

5y2 

5% 

5% 

5y2 

5y2 

5y2 

5% 

5y2 

3 

3% 

sy* 

3% 

3% 

3% 

4 

4 

4 

4 


Statement  showing  rates  on  grain,  ex-Lake,  domestic,  and  export,  from  Buffalo, 
N.  Y.,  to  Plnladelplna,  Pa.,  from  1899  to  date,  via  Western  New  York  and 
Pennsylvania  Bailroad. 

DOMESTIC. 
[Rates  in  cents  per  bushel.] 


TARIFF. 

FROM 

BUFFALO-    N. 
PHIA 

Y.,    TO   PHILADEL- 
.    PA. 

DATE. 

03 

•a 
1 
ca 

00 

>. 
ca 

0 
c 

05 

0 

1899_May   14   

I.  C.  C.  No. 

S.  1-390 

S.  2-425 

S.  4-425 

S.  5-S.  22 

S.  &-S.,  22 

S.  7-S.  22 

•    S.  75 

S.  143 

S.  145 

S.  207 

S.  221 

S.  297 

S.  323 

S.  2-S.  323 

S.  4-S.  323 

S.  5-S.  S2;b 

S.  6-S.  323 

S.  7-S.  323 

S.  8-S.  323 

S.  9-S.  323 

S.  10-S.  323 

S.  11-S.  323 

S.  12-S.  323 

6 

iV2 

4y2 

6 

4y2 

4 

4 

4 

4y4 
4^ 
4y4 
4y4 
4y4 
4y4 
4% 
5y4 
sy* 
5y4 

4 

5y2 

4 

4y4 

4% 

4y4 

4y4 

4y4 

4% 

4% 

5y4 

5y4 

sy* 

2% 

Nov.  1  

3 

1900— Mar.  11   

2% 

1901— Mar.  9  

3% 

Apr.   1   

3% 

May  1    

3% 

4y2 
4y2 
4y2 
5 

5V2 

5y2 

4y2 

4% 

4y2 

5 

5y2 

6 

6 

4 

4% 

5 

4.6 

4.2 

3.8 

3.4 

3 

2.6 

2.2 

4 

4 

4 

4% 

5 

5 

6 

3 

Dec.  24  

3% 

1902— Jan.   4    

3% 

Nov.  15  

314 

1906— Jan.   1    

4 

Apr.   1    

4 

May   12    

4 

Sept.  24  

Nov.  25 

1904— Jan.   1    

Feb.  8   

Feb.  13    



Feb.  13   

Feb.  17   

Feb.  19   

Feb.  26   

Mar.  3  

Statement  showing  rates  on  grain,  ex-Lake,  domestic,  and  export,  from  Buffalo, 
N.  ¥.,  to  Philadelphia,  Pa.,  from  1899  to  date,  etc. — Continued. 

FOK   EXPOKT. 


DATE. 


TARIFF. 


PROM   BUFFALO.  N.   Y..   TO   PHILADEL- 
PHIA,   PA. 


1904— Jan.  18 
Feb.  8 
Feb.  13 
Feb.  13 
Feb.  17 
Feb.  19 
Feb.  26 
Mar.  3 
Mar.  9 
Mar.  15 
Mar.  21 
Mar.  26 


C.  C.  No. 
S.  418 
S.  4261 
S.  429! 
S.  431 
S.  436 
S.  438! 
S.  442 
S.  444 
S.  448 
S.  453 
S.  456 
•S.  457 


4.6 

4.6 

4.1 

4.35 

4.2 

4.6 

3.7 

3.95 

3.8 

3.8 

3.3 

3.55 

3.4 

3.4 

2.9 

3.15 

3 

3 

2.5 

2.75 

2.6 

2.6 

2.1 

2.35 

2.2 

2.2 

1.7 

1.95 

1.8 

1.8 

1.3 

1.55 

1.4 

1.4 

0.9 

1.15 

1 

1 

0.5 

0.75 

0.6 

0.6 

0.5 

0.35 

0.2 

0.2 

0.1 

0.35 

4.35 

3.95)» 

3.55 

3.15 

2.75 

2.3a 

1.95 

1.55 

1.15 

0.75 

0.35 

0.35 


3.6 

3.2 

2.8 

2.4 

2 

1.6 

1.2 

0.8 

0.4 

0.4 

0.4 

0.4 


*NOTK.— Export  rates  withdrawn   by  the  Pennsylvania  Railroad  from  Buffalo,   April  30, 
1904,  by  S.  1  to  I.  C.  C.  457.     For  domestic  rates  see  I.  C.  C.-S.  323. 

DOMESTIC. 


DATE. 


TARIFF. 


FROM    BUFFALO.    N.   Y.,    TO   BALTIMORE, 
MD. 


1899— May  14 
Nov.  1 

1900— Mar.  11 

1901— Mar.  9 
Apr.  1 
May  1 
June  1 
Dee.    24 

1902— Jan.  4 
Nov.  15 

1903— Jan.  1 
Apr.  1 
May  12 


I.  C.  C.  No. 

S.  1-390 

S.  2-425 

S.  4-425 

S.  5-S.  22 

S.  6-S.  22 

S.  7-S.  22 

S.  75 

S.  143 

S.  145 

S.  207 

S.  221 

S.  297 

S.  323 


41/2 

6 

4% 


4% 

41/2 

4% 

5 

5% 

5% 

5% 


4y2 

6 

41/4 


4% 

4y2 

4V 
5 


4 

5V2 
4 

414 
414 

4% 
4% 
4% 
5% 
5% 
5Vi 


4 

5M! 

4 

4% 

iV- 

iVi 

4% 

4% 

4% 

4% 

sy* 


2% 

3 

2y2 

3% 

3% 

3Vi 

3 

3% 

3V4 

3% 

4 

4 

4 


FOR  EXPORT. 


1904 — Jan.  18  

S.  418 
S.  426 
S.  429 
S.  431 
S.  436 
S.  438 
S.  442 
S.  444 
S.  448 
S.  453 
S.  456 
S.  457 

4.6 

4.2 

3.8 

3.4 

3 

2.6 

2.2 

1.8 

1.4 

1 

0.6 

0.2 

4.6 

4.6 

3.8 

3.4 

3 

2.6 

2.2 

1.8 

1.4 

1 

0.6 

0.2 

4.1 

3.7 
3.3 
2.9 
2.5 
2.1 
1.7 
1.3 
0.9 
0.5 
0.5 
0.1 

4.35 
3.95 
3.55 
3.15 
2.75 
2.35 
1.95 
1.55 
1.15 
0.75 
0.35 
0.35 

4.35 
3.95 
3.55 
3.15 
2.75 
2.35 
1.95 
1.55 
1.15 
0.75 
0.35 
0.35 

3.6 

Feb.  8  

3.2 

Feb.  13  

2.8 

Feb.  13  

2.4 

Feb.  17  

2 

Feb.  19  

1.6 

Feb.  26  

1.2 

Mar.  3  

0.8 

Mar.  9  

0.4 

Mar.  15  

0.4 

Mar.  21  

0.4 

Mar.  26 

0.4 

NOTEj— Export  rates  from  Buffalo  were  withdrawn  by  the  Pennsylvania  Railroad  by  S. 
1  to  I.  C.  O.  No.  457,  effective  April  30,  1904.    For  domestic  rates  see  I.  C.  C.-S.  323. 

266 


MEMORANDUM  :     DIFFERENTIAL    RATES 
Table  No  6. 


267 


Statement  showing  changes  in  rates  on  ex-Lake  grain,  for  domestic  use  and  export 
from  Erie,  Pa.,  to  Boston,  Mass.,  via  Erie  and  Western  Transportation  Com- 
pany  (Pennsylvania  Railroad  Company.) 

DOMESTIC. 
[Rates  in  cents  per  bushel.] 


FROM  ERIE 

,  PA.,  TO  BOSTON,  MASS. 

^^ 

•^ 

Xi 

,-, 

'A 

DATES. 

o 

% 

£ 

£1 

.D 

s 

a 
o 

-a 

to 

<g 

h 

m 

o 

y. 

7h 

a 

a 

g 

-3 

03 

03 

o 

>. 

<a 

o 

o 

^ 

^ 

P3 

o 

« 

O 

O 

« 

I.  C.  C.  No. 

I.  C.  C.  No. 

I9ni- 

-May  13       

61/2 

&Vi 

5V^ 

6 

6 

4 

99 

99 

FOR  EXPORT. 


1897— Mar.  15 

Oct.   20 

1898— Mar.  15 


*5 

*5 

*4y4 

•4% 

*4% 

*3y2 

*5% 

*5% 

*5 

*5y2 

*5% 

*4 

5 

5 

4y4 

4% 

4% 

3y2 

I.  C.-C.  No. 
2 

22 
24 


I.  C.  C.  No. 
2 

22 

24 


*In  cargo  lots,  oats  10,000,  other  grain  8,000  busliels. 

Statement  showing  changes  in  rates  on  grain,  ex-Lalce,  domestic,  from  Erie,  Pa., 
to  New  Yorlc,  N.  Y.,  via  Erie  and  Western  Transportation  Company. 

DOMESTIC. 
[Rates  in  cents  per  bushel.] 


DATES. 


PROM 

ERIE, 

PA.,  TO  NEW  YORK, 

N.  T. 

/-> 

^ 

B 

^ 

ja 

<o 

Xi 

"m 

-^ 

■^ 

X3 

XI 

to 

-o 

00 

■Xl 

■w 

OJ 

t». 

^^ 

s 

^-' 

a; 
a 

E 

a 

03 
O 

1889— June  17 
June  19 
July  22 
Aug.  23 
Oct.  7   . 

1890— June   5 

1891— Mar.  19 
May  20 
Aug.  1  . 
Aug.  15 

1892— Apr.  15 
May  6  . 
May  13 
May  18 
June  13 
Aug.  8  . 
Sept.   1 
Sept.  1 
Sept.  24 
Oct.  17 
Oct.  26 
Oct.  29 
Nov.    5 


6 

7 
6V2 

678 

614 
6% 

syz 
5% 
ey* 
evs 
5% 
5y2 
5% 
4y2 
4% 
5% 
5% 

6 

ey* 

6% 

7y4 
7% 


&y2 

5y8 

5% 

5% 

ey* 

5% 

eyg 

578 

5% 

5% 

5% 

5y8 

sy* 

5% 

4y2 

4y8 

4% 

4% 

5% 

9% 

sy* 

478 

6 

5% 

ey* 

578 

6% 

6% 

7y4 

678 

7% 

7% 

ey8 
5% 

61/8 

5% 
6y8 
5% 

578 

5y8 
5% 

578 
578 

5% 

5y8 

578 

4y8 


478 

5% 

578 

6% 

678 


578 

5% 

578 

578 
5% 

syg 

5Vs 
iVs 
4% 
5% 

478 

5% 


378 

3% 

478 
378 

4% 

4 

4% 

478 
474 

4y2 

4% 

378 

3% 
3% 


3% 

478 


4% 

5y8 

5% 


File  No. 
345 
346 
358 
363 
367 
395 
418 
436 
454 
457 
469 
486 
490 
493 
507 
515 
519 
529 
536 
544 
548 
651 
556 


lie 

15 

22 

27 
31 
16 

2 
15 
29 
32 

1 
12 
15 
18 
25 
27 
30 
37 
42 
47 
50 
53 
57 


268 


ATLANTIC    PORT    DIFFERENTIALS 


Statement  showing  changes  in  rates  on  grain,  ex-Lake,  domestic,  from  Erie,  Pa., 
to  New  York,  N.  Y.,  etc. — Continued. 

DOMESTIC— Continued. 


DATES. 


1892— Nov.   8   . 

Nov.   23 

Nov.   28 
1893— Apr.  4   .. 

June  17  . 

July  5  . . 
1894— Mar.  20  . 
1895— Apr.  11   . 

Aug.  24  . 

Nov.  1  .. 

Nov.   27 

1896— Mar.   28 

Mar.   28 
1897— Mar.   15 

Oct.  20  . 
1898— Mar.  15  . 
1899— Apr.  27   . 

Nov.  1  . 
1900— Apr.  10  . 

Nov.  10  . 

Nov.  19  . 

Dee.  4  . 
1901— May  13   , 

June  1  . 
1902— Apr.  21   , 

Nov.  15  . 
1903— Mar.   21 

May  4   . 


FROM  ERIE,  PA.,  TO  NEW  YORK,  N.  Y. 


^-s 

W 

^ 

g 

£ 

j2 

'— ' 

oo 

■o 

CO 

i 

c 

^ 

03 

n 

O 

7V4 

7y4 

6% 

67/8 

B% 

6% 

6% 

6% 

«V4 

ey* 

5% 

578 

6% 

6% 

6% 

V 

6y4 

6% 

«% 

6% 

6% 

5% 

5% 

5% 

5% 

i>% 

4% 

5% 

t> 

4 

4% 

5 

5 

4 

4% 

!>% 

5% 

4% 

5% 

►5.25 

*7.50 

•4.875 

6.25 

5.5 

6 

5 

5 

4y4 

4% 

5% 

5% 

5 

5y2 

5 

5 

4y4 

4% 

5 

5 

4y4 

4% 

6'/i! 

61^ 

5% 

6 

5 

5 

4y4 

4y2 

a 

5 

4y4 

4V^ 

5 

5 

4 

4y2 

5 

5 

4y4 

4% 

6 

5 

4y4 

4% 

5 

5 

4y4 

4y2 

5% 

5% 

4% 

5 

6 

6.5 

5.25 

5 

6 

6.5 

5.25 

5.5 

678 

6% 

5% 


6% 
5% 
5% 
4% 
4% 


*4.875 
6 

4% 
5% 
4% 

4y2 

6 

4y2 
4y4 


4y2 
4y2 

4% 

41^ 

5 

5 

5.5 


sys 

4% 

4y8 


4% 
3% 
3% 


•4.125 
4.50 
3.5 
4 

3% 
3 

3% 
3 
4 

3% 
3% 
3% 
3y4 
3% 
3% 
4 
4 


I.  c.  c, 


File  No. 
558 
562 
565 
570 
586 
590 
625 
683 
711 
722 
725 
No. 
1 
1 
1 
21 
23 
52 
87 
90 
94 

m 

96 
99 
101 
108 
111 
112 
116 


I.e. 


C.  No. 
1 
1 

1 
21 
23 
52 
87 
90 
94 
t94 
96 
99 
101 
106 
111 
112 
116 


EXPORT. 


1897— Mar.  15 
Oct.  20 

1886— Mar.    15 

1903— Sept.  17 
Nov.  16 

1904— Apr.  30 


•5 

•5 

*4y4 

•4% 

•4% 

*3y2 

•5% 

•5% 

•5 

•5% 

•5% 

•4 

•5 

*5 

*4% 

•4% 

•4% 

•31/2 

4 

4 

3.5 

3.75 

3.75 

3 

4.50 

4.50 

4 

4.25 

4.25 

3.50 

4 

4 

3.5 

3.75 

3.75 

3 

I.  C.  C.  No.il. 

ll 
21  i 
23 
117 
118 
132 


C.  C. 


No. 
1 
21 
23 
117 
118 
132 


♦In  cargo  lots,  oats  10,000,  other  grain  8,000  bushels, 
t  Corrected. 


MEMORANDUM:     DIFFERENTIAL   RATES 


269 


Statement  showing  changes  in  rates  on  grain,  ex-Lake,  domestic,  from   Erie,  Pa., 
to  Philadelphia,  Pa.,  via  Erie  and  Western  Transportation  Company. 

[Rates  in  cents  per  bushel.] 
DOMESTIC. 


DATES. 


1889— June  17  . 
June  19  . 
July  22  . 
Aug.  23  . 
Oct.  7  .. 
1890— Mar.  19  . 
June  5  . 
1891— Mar.  19  . 
May  20  . 
June  12 
June  13 
Aug.  1  . 
Aug.  15  . 
1892— Apr.  15  . 
May  6  .. 
May  13  . 
May  18  . 
May  30  . 
June  10  . 
June  13  . 
Aug.  8  . . 

Sept.  1    . 

Sept.  1    . 

Sept.  24 

Oct.  17 

Oct. 

Oct. 

Nov. 

Nov. 

Nov. 

Nov. 
1893— Apr. 

June  17  . 

July    5    . 
1894— Mar.   12 

Mar.   20 
1895— Apr.  11   . 

Aug.   24 

Nov.   1    . 

Nov.    27 

1896— Mar.   28 
Mar.   28 

1897— Mar.   15 
Oct.   20   . 

1898— Mar.    15 

1899— Apr.  27   . 
Nov.    1    . 

1900— Apr.  10  . 

Nov.  10  . 

Dec.  4   .. 
1901— May  13   , 

June  1    . 
1902— Apr.  21   , 

Nov.   15 
1903— Mar.   21 

May  4   . 


26  . 
29  . 
5   . 

8    . 
23 

28 

4     , 


FROM  ERIE,  PA.,  TO  PHILADELPHIA,  PA. 

^~, 

^ 

JD 

^ 

s 

£ 

J2 

m 

1 

00 

1 

■<*< 

CO 

o 

S5 

4* 

>> 

^^ 

w 

X 
03 

e 

o 

>, 

OS 

^ 

1^ 

a 

Q 

« 

O 

4% 


4% 

5 

5 

41/2 

4% 

4 

4 

31/2 

3^4 

31/2 

41^ 

4 

4' 

5 

SVz 

6 

6-_ 

6  ^ 

5% 

5 

5% 

5% 

5y2 


4 

4y2 

5 

5 

4y2 

4% 

4 

4 

3 

314 

3% 

4  _ 

4 

4% 

5 

r>% 

6 

6% 
6 

5 


4% 

4% 

3% 

4 

4% 

.4 

5 

5% 
5 

4y2 

6 

41^ 
4% 
4% 
414 

4y2 

4y2 

5 

5y2 

5% 


4% 


4 

41^ 


4% 

4% 

4% 

4% 

4 

4 

3% 

3% 

3 

3% 

4y4 

3% 

4% 

4% 

5% 

5% 

6y4 

5% 

5y4 

4% 

5 

sy* 

5 


5 

5% 
5% 

4% 

6 

4y2 
4y2 
4y2 

4% 

5 

6 


4y4 

3% 

3 

3y2 

3% 

*3% 

5 

4% 

5 

4y4 

4 

5y4 

4 

4 

4 

4 

4 

4 

4% 

5 

5 


4% 

4% 

4% 

4y4 

4 

4 

3% 

3% 

3 

3V4 

iV4 

3% 

4y2 
4% 
sy* 

5% 

ey* 
5% 
514 
4% 
5y4 
5% 
5y4 
414 
4y4 
4y4 
3y2 
3% 
4y4 

♦3% 
5 

4% 
51^ 
4% 
4 
5% 


4y4 
4y4 
4y4 
4y4 
4% 
5% 

5>4 


4% 

4% 

4% 

4y4 

4 

4 

3% 

3y4 

3 

3y4 

4y4 

3% 

4y2 

4% 

5V4 

5% 

eVi 
5% 
5y4 
4% 
sy* 
5y2 
5% 
4y4 
4y4 
4y4 
3% 
3% 
4% 

•3% 
5 

4% 

4% 

4 

5% 

4 

4 

4y4 
4y4 
414 
4y4 
4% 
sy* 
5y4 


3y4 

3 

3% 

sy* 

4 


3% 
3% 


31^ 

3% 

3% 

3y4 

3 

3 

3 

3 

3 

3 

4 

3 

3% 

3% 

4 

4% 

5 

4^^ 

4 

3% 

3% 

4 


3% 

3% 

3 

3% 

3% 

•3y2 
4 

3% 
4 
3% 

2y2 
3 

21^ 
3% 

3V^ 
3»^ 
3 
3>4 

3^! 

4 
4 


File  No. 
345 
346 
358 
363 
367 
373 
395 
418 
436 
444 
446 
454 
457 
461 
486 
490 
493 
500 
505 
507 
515 
519 
529 
536 
544 
548 
551 
556 
558 
562 
565 
570 
586 
590 
623 
625 
683 
711 
722 
725 
I.  C.  C.  No. 
1 
1 
1 

21 
23 
52 


LC. 


C.  No. 
90 
94 


101 
108 
111 
112 
116 


116 
15 
22 
27 
31 
1 
16 
2 
15 
21 
22 
29 
32 
1 
12 
15 
18 
21 
23 
25 
27 
30 
37 
42 
47 
50 
53 
57- 
59 
62 
65 
2 
7 

10 
1 
3 
2 
4 
6 


1 
1 
1 
21 
23 
52 
86 

90 
94 
96 
99 
101 
108 
111 
112 
116 


•In  cargo  lots,  oats  10,000,  other  grain  8,000  bUBhels. 


270 


ATLANTIC    PORT   DIFFERENTIALS 


Statement  showing  changes  in  rates  on  grain,  ex-Lalce,  domestic,  from  Erie,  Fa., 
to  Philadelphia,  Fa.,  etc. — Continued. 


DATES. 


FROM  ERIE,  PA.,  TO  PHILADELPHIA,  PA. 

y«-N 

-: 

5 

^ 

J2 

CC 

S 

1^ 

-T 

^ 

o 

00 

£ 

j2 

X3 

"S 

-<*' 

to 

«5 

.  ca 

a 

-- 

^ 

03 

o 

t». 

03 

fH 

pq 

O 

« 

O 

EXPORT. 


I.  0.  C.  No. 

1897-Mar.   15    

*4 

»4 

*3% 

*3% 

*3% 

*3 

1 

1 

Oct.  20   

*i% 

»4% 

*4y2 

*4y2 

*4y2 

*3y2 

21 

21 

1898— Mar.   15    

*5 

*5 

*4V4 

*4% 

♦43/4 

*3% 

23 

33 

1899— Apr.  27   

SVz 

3y2 

2% 

2% 

3V4 

2% 

52 

52 

Aug.   7    

3>^ 

3% 

2% 

2% 

3 

2 

74 

74 

Oct.   1   

3% 

31/2 

3 

SVi 

sy* 

2y4 

80 

80 

Nov.   1    

5 

5 

iV4 

41/2 

4y2 

3 

86 

86 

1900— Apr.  10  

3 

3 

21/2 

2% 

2% 

2 

90 

90 

Nov.  10  

4 

4 

31/2 

3% 

3% 

3 

94 

94 

Dec.   4    

41/2 

i% 

4 

iVi 

4y4 

3% 

96 

96 

1901— May  13   

4 

4 

31/2 

3% 

3% 

3 

99 

99 

June   1    

31/2 

31/2 

3 

sy* 

sy* 

2y2 

101 

101 

1902-Apr.  21    

41/2 

41/2 

4 

4y4 

4y4 

3% 

108 

108 

June   20    

3.9 

3.9 

3.5 

3.7 

3.7 

3.2 

109 

109 

Sept.   1    

4.5 

4.5 

4 

4.25 

4.25 

3.5 

110 

110 

1903— Mar.   21    

5 

W2 

41/2 

4.75 

4.75 

4 

112 

112 

May  4   

5 

5 

41/2 

4.75 

4.75 

4 

116 

116 

Sept.   15   

3.6 

3.6 

3.1 

3.35 

3.35 

2.6 

117 

117 

Nov.  16  

4.10 

4.10 

3.60 

3.85 

3.75 

3.10 

118 

118 

1904— Feb.  8   

4.20 

4.20 

3.70 

3.95 

3.95 

3.20 

119 

119 

Feb.  12   

3.80 

3.80 

3.30 

3.55 

3.55 

2.80 

120 

120 

Feb.  15   

3.4 

3.4 

2.9 

3.15 

3.15 

2.4 

121 

121 

Feb.  18  

3 

3 

2.5 

2.75 

2.75 

2 

122 

122 

Feb.  20  

2.6 

2.6 

2.1 

2.35 

2.35 

1.6 

123 

123 

Feb.  26  

2.2 

2.2 

1.7 

1.95 

1.95 

1.2 

124 

124 

Mar.   4    

1.8 

1.8 

1.3 

1.55 

1.55 

0.8 

125 

125 

Mar.    9   

1.4 

1.4 

0.9 

1.15 

1.15 

0.4 

126 

126 

Mar.   15    

1 

1 

0.5 

0.75 

0.75 

0.4 

127 

127 

Mar.    21    

0.6 

0.6 

0.5 

0.35 

0.35 

0.4 

128 

128 

Mar.   26    

0.2 

0.2 

0.1 

0.35 

0.35 

0.4 

129 

129 

Apr.  30  to  date   . . 

4 

4 

3.5 

3.75 

3.75 

3 

132 

132 

*In  cargo  lots,  oats  10,000,  other  grain  8,000  bushels 


MEMORANDUM  :     DIFFERENTIAL    RATES 


271 


Statement  showing  changes  in  rates  on  grain,  ex-Lake,  domestic,  from  Erie,  Pa., 
to  Baltimore,  Md.,  via  Erie  and  Western  Transportation  Company. 

DOMESTIO. 

[Rates  in  cents  per  bushel.] 


DATES. 


1889— June 
June 
July 
Aug. 
Oct. 

1890— Mar. 
June 

1891— Mar. 
May 
June 
Aug. 
Aug. 

1892— May 
May 
May 
May 
June 
June 
Aug. 
Sept. 
Sept. 
Sept. 
Oct. 
Oct. 
Oct. 
Nov. 
Nov. 
Nov. 
Nov. 

1893— Apr. 
June 
July 

1894— Mar. 

1895— Apr. 
Aug. 
Nov. 
Nov. 


17 
19 

22  . 

23  . 
7    .. 

10 
5    . 
19 
20  . 
12 
1    . 
1.5 


13  . 
18  . 
30   . 

10 

13 

8    . 

1    . 

1    . 

24 

17  . 
26  . 
29   . 

5    . 

8    . 

23 

28 
4    .. 

17 

5    . 

20 
11    . 

24 

1    . 

27 


189G— Mar.  28 
Mar.   28 

1897— Mar.  16 
Mar.  15 
Oct.  20   . 

1898— Mar.   15 

1899— Apr.  27   . 
Nov.   1    . 

1900— Apr.  10  , 

Nov.  10  . 

Dec.  4    ., 
1901— May  13   , 

June   1    . 
1902— Apr.  21   , 

Nov.    15 
1903— Mar.   21 

May  4   . 


FROM  ERIE, 

PA.,  TO  BALTIMORE 

MD. 

^-« 

~ 

s 

^ 

o 

s 

X3 

£ 

s 

s 

■a 

CO 

(M 

as 

1 

IS 

e 

4) 

CO 

^ 

>i 

a 

Ph 

« 

o 

cs 

O 

41/2 

4 


41/2 
5 

41/2 

4V4 

4 
4 
31/2 

31/2! 

41/2 

4 

4% 

5 

51/2 

6 

6^'2 

6 

51/2 

5 

5% 

5% 

51/2 

41/2 

41/2 

3% 

4 

41/2 

*4 
51/4 
5 
5 

5% 
5 
41/2 


41/2 

5 

41^ 

4% 

4 

4 

31/2 

3V4 

3% 

41/2 

4 

4% 

5 

5V^ 

6 

6% 

6 

5% 

5 


4% 


41/2 

41/2 

4% 

4% 

4V^ 

4% 

5 

6 

6 


3% 


41/2 

4% 

4% 

4 

4 

3% 

3y4 

3 

sy* 
4y4 
3% 
4y2 
4% 

5^4 

5% 

6% 

5% 

5% 

4% 

5 

5Vi 

5 

4y4 

3% 

3 

3y2 

3% 

»3% 
5 

4y4 

4% 
5 

4y4 

4 

5y4 

4 

4 

4 

4 

4 

4 

4% 

5 

5 


4% 

4% 

4y4 

4 

4 

3% 

3y4 

3 

3y4 

4y4 

3% 

4% 

4% 

5y4 

5% 

ey* 

5% 

514 

4% 

514 

5y2 

514 

4y4 

4y4 

3y2 

3% 

4y4 

*3% 

5 

4% 

4% 

5y2 

4% 

4 

5y2 

4 
4 

4y4 
4% 
4% 
4^ 
4% 
5y4 

5V4, 


3% 


4y4 

4% 

4y4 

4 

4 

3% 

314 

3 

3y4 

4% 

3% 

4y2 

4% 

514 

5% 

6y4 

5% 

5y4 

4% 
5% 

5y2 
5% 
4% 
414 
3y2 
3% 
4y4 

*3% 

5 

4% 
4% 

572 
4% 
4 

5y2 

4 
4 

414 
414 
4y4 
414 
4% 
5y4 
6y4 


3y8 


3V4. 

3 
3% 


3 

3% 

3% 

3 

31/^ 

3% 

4% 

3 

3 

3 

3 

3 

3 

4 

3 

31^ 

3% 

4 

4y2 

5 

4% 

4 

3% 

3% 

4 

3% 

3% 

3% 

3 

sy* 

3% 

*3y2 
4 

31^ 
3y2 
4 
3% 

3 

2y2 

3y2 

3y2 

3% 

3 

3y2 

3% 

4 

4 


File  No. 
345 
346 
358 
363  i 
367 
373 
395 
418 
436 
444 
454 
457 
486 
490 
493 
.500 
505 
507 
515 
519 
529 
536 
544 
548 
551 
556 
558 
562 
565 
570 
586 
590 
625 


I.  C.  C, 


I.  C.  C. 


711 

722 

725 

No. 

1 

1 

1 

1 

21 

23 

52 

86 

No. 

90 

94 

96 

99 

101 

108 

111 

112 

116 


116 
15 
22 
27 
31 
1 
16 
2 
15 
21 
29 
32 
12 
15 
18 
21 
23 
25 
27 
30 
37 
42 
47 
50 
53 
57 
59 
62 
65 
2 
7 

10 
3 
2 
4 
6 


1 
21 
23 
53 
86 

90 
94 
96 
99 
101 
108 
111 
112 
116 


»In  cargo  lots,  oats  10,000,  other  grain  8,000  bushels. 


272 


ATLANTIC    PORT    DIFFERENTIALS 


Statement  showing  changes  in  rates  on  grain,  ex-Lake,  domestic,  from  Erie,  Pa., 
to  Baltimore,  Md.,  via  Erie  and  Western  Transportation  Company — Continued. 


DATES. 


FROM  ERIE,  PA.,  TO  BALTIMORE,  MD. 


FOR  EXPORT. 

I.  0.  C.  No. 

I.  C.  C.  No. 

1897— Mar.   15    

»4 

*4 

*3% 

*3% 

*3% 

*3 

1 

1 

Oct.   20   

*4% 

•4% 

*4y2 

*4y2 

*4i^ 

*3% 

21 

21 

1898— Mar.   15    

*5 

♦5 

*4y4 

*4% 

*4% 

*3l^ 

23 

23 

1899- Apr.  27   

31/2 

31^ 

2% 

2% 

3y4 

2% 

52 

52 

Aug.   7    

31/2 

3y2 

2% 

2% 

3 

2 

74 

74 

Oct.   1   

Wz 

3y2 

3 

sy* 

314 

2^ 

80 

80 

Nov.   1    

5 

5 

Wi 

4y2 

4% 

3 

86 

86 

1900-Apr.  10  

3 

3 

V-k 

2% 

2% 

2 

90 

90 

Nov.    10   

4 

4 

3y2 

3% 

3% 

3 

94 

94 

Dec.   4    

*% 

41/2 

4 

4y4 

4% 

31/^ 

96 

96 

1901— May  1.3   

4 

4 

3y2 

3% 

3% 

8 

99 

99 

June  1    

3V^ 

3y2 

3 

3% 

314 

2% 

101 

101 

1902— Apr.  21   

i% 

4y2 

4 

4% 

4% 

3% 

108 

108 

June   20    

3Vz 

3y2 

3y4 

3y4 

3^4 

3 

109 

109 

Sept.   1    

4.1 

4.1 

3.6 

3.85 

3.85 

3.1 

110 

110 

1903— Mar.    21    

4.6 

5.1 

4y2 

4.35 

4.35 

3.6 

112 

112 

May  i   

4.6 

4.6 

4.1 

4.35 

4.35 

3.6 

116 

116 

Sept.   15   

3.6 

3.6 

3.1 

3.35 

3.35 

2.6 

117 

117 

Nov.    16    

4.10 

4.10 

3.60 

3.85 

3.85 

3.10 

118 

118 

1904— Feb.  8   

4.20 

4.20 

3.70 

3.95 

3.95 

3.20 

119 

119 

Feb.  12   

3.8 

3.8 

3.3 

3.55 

3.55 

2.8 

120 

120 

Feb.  15 

3.4 

3.4 

2.9 

3.15 

3.15 

2.4 

121 

121 

Feb.  18  

3 

3 

2.5 

2.75 

2.75 

2 

122 

122 

Feb.  20  

2.6 

2.6 

2.1 

2.35 

2.35 

1.6 

123 

123 

Feb.  26  

2.2 

2.2 

1.7 

1.95 

1.95 

1.2 

124 

124 

Mar.    4    

1.8 

1.8 

1.3 

1.55 

1.55 

0.8 

125 

125 

Mar.    9    

1.4 

1.4 

0.9 

1.15 

1.15 

0.4 

126 

126 

Mar.    15    

1.0 

1.0 

0.5 

0.75 

0.75 

0.4 

127 

127 

Mar.   21    

0.6 

0.6 

0.5 

0.35 

0.35 

0.4 

128 

128 

Mar.    26    

0.2 

0.2 

0.1 

0.35 

0.35 

0.4 

129 

129 

Apr.  30  to  date  . . . 

3.6 

3.6 

3.1 

3.35 

3.35 

2.6 

132 

132 

*In  cargo  lots,  oats  10,000,  other  grain  8,000  bushels 


Table  No.  7. 

Statement  showing  changes  in  rates  on  grain,  ex-Lake,  domestic  and  export,  from 
Fairport,  Ohio,  to  Netv  York,  N.  Y.,  via  Pittsburgh  and  Western  Railroad. 

DOMESTIC. 
[Rates  in  cents  per  bushel.] 


FROM 

FAIRPORT,  OHIO,  TO  NEW  YORK, 
N.  T. 

TARIFFS. 

^-^ 

^ 

DO 

X! 

,_^ 

0 

DATES. 

JD 

CO 

.2 

^ 

'-^ 

2 

;^ 

o 

£ 

j2 

.Q 

0 

-a 

TP 

s 

m 

0 

to 

a 

0) 

CO 

g 
a 

"A 

OS 

^ 

.2 

Si 

>. 

a 

0 

0 

P4 

pq 

Q 

0^ 

0 

0 

« 

I.  C.  C.  No. 

[.  C.  C.  No. 

1899— May    1    

31/2 

*3y2 

5 

3% 

2% 

2% 

Zhi 

2% 

225 

225 

*3y2 
5 

*2% 

*2% 

*Wi, 

*2y2 
3 

226 

226 

May    4    

4y4 

4% 

4% 

226 

226 

FOR  EXPORT. 


1899— May    15 


3y2 


3y2 


2% 


2% 


sy* 


2y2 


229 


229 


*In  cargo  lots,  oats  10,000,  other  grain  8,000  bushels. 

Statement  showing  changes  in  rates  on  grain,  ex-Lake,  domestic,  from  Fairport, 
Ohio,  to  Philadelphia,  Pa.,  via  Pittsburgh  and  Western  Railway  and  Baltimore 
and  Ohio  Eailroad. 

DOMESTIC. 
fRates  in  cents  per  bushel.] 


TARIFFS. 


FROM 

FAIRPORT.   OHIO,   TO  PHILADEL-   1 

PHI  A.,  PA. 

1 

^ 

^ 

£1 

^ 

.Q 

<o 

S 

^2 

O 

^ 

,9 

J2 

£l 

X2 

■o 

■* 

CO 

<£> 

M 

4^ 

o 

t*, 

^-' 

w- 

-"-^ 

^ 

a 

«) 

£ 
^ 

a 

cS 

o 

>. 

C3 

f^ 

m 

O 

« 

O 

d 

^; 

d 

o 

.S 

A 

p 

■a 

c 

03 

o 

O 

O 

Oh 

1899— May  1   . 

May  4    . 

May  4    . 
190O— Nov.  30 

Dee.  24    , 
1901— -Tan.  29  , 

Oct.  7   ., 

Dec.   20 
1902— Apr.  7   . 

Apr.  21   , 

June   16 

Nov.  15  , 

1903— Jan.  1   . 

Apr.  1   . 


3% 

3y2 

2% 

2% 

3y4 

21^ 

*3% 

*3% 

*2% 

*2% 

*3y4 

*2y2 

4y2 

4% 

4 

4 

2y2 

4y2 

4% 

4 

4 

3 

4% 

4% 

4 

4 

4 

3y4 

4% 

4% 

4y4 

4y4 

3y2 

4y2 

4y2 

4y4 

4y4 

3y4 

4y2 

4y2 

4% 

4y4 

3% 

3% 

3% 

4y4 

4y4 

3% 

3% 

3% 

4y4 

4y4 

3% 

4% 

4V2 

4 

4^ 

4y4 

3% 

5 

5 

4y2 

4% 

4% 

3% 

5y2 

5V^ 

5 

5y4 

5y4 

4 

5% 

6 

5 

sy* 

5y4 

4 

C.  C.  No. 

225 

226 

226 

345 

351 

363 

406 

S.  1-406 

499 

S.  1-422 

B.  and 

3636 

3822 

3876 

4113 

I.  C.  C.  No. 

225 

226 

226 

345 

3.51 

363 

406 

S.  1-406 

422 

S.  1-422 

O.  R.  R. 

3636 
3822 
3876 
4113 


*In  cargo  lots,  oats  10,000,  other  grain  8,000  bushels. 

FOR  EXPORT. 
(Via  Pittsburgh  and  Western  Railway.) 


1899— May  15 
Nov.   6 


18 


3y2 

3y2 

2% 

2% 

sy* 

2y2 

6 

6 

sy* 

5y2 

5y2 

3 

229 

261 


229 
261 


273 


274 


ATLANTIC    PORT   DIFFERENTIALS 


Statement  showing  changes  in  rates  on  grain,  ex-Lake,  domestic,  from  Fairport, 
Ohio,  to  Baltimore,  Md.,  via  Erie  and  Western  Transportation  Company,  Pitts- 
burgh and  Western  Eailway,  and  Baltimore  and  Ohio  Eailroad. 

DOMESTIC. 
[Rates  in  cents  per  bushel.] 


DATES. 


FROM 

FAIRPORT,   OHIO,   TO 
MD. 

BALTIMORE, 

y^ 

^ 

E 

^ 

CO 

JD 

(n 

• 

QQ 

.Q 

.c 

s 

^^ 

SS 

-o 

i 

S 

4^ 

OJ 

>. 

^.^ 

c 

m 

£ 
^ 

09 

C3 

o 

Si 

ea 

fe 

ffl 

O 

K 

O 

6 

z 

o 

o 

M 

o 

.^ 

^, 

E 

53 

o 

o 

o 

« 

1891— Apr.  13 
May  18 
June   12 
Aug.  1  . 
Aug.    15 

ISg?— Feb.  29 
Apr.  30 
May  6  . 
May   13 
May  18 
May  30 
.Tune   10 
.Tune   13 
Aug.  8  . 
Sept.   1 
Sept.   1 
Sept.  24 
Oct.   17 
Oct.  26 
Oct.  29 
Nov.  5  . 
Nov.  8  . 
Nov..  23 
Nov.  28 

1893— Apr.  4  . 
June  17 
July  .5  . 

1894— Mar.    ?0 

1895— Apr.  11 
Aug.  24 
Nov.  1 
Dec.   1    . 

1896— Mar.   28 

Mar.  28 
1897— Mar.  15 
1899— May  1    . 

May  4    . 

May  4   . 

May  15 
1900— Mar.    15 

Nov.    30 

Dec.  24 
1901— Jan.  29 

June   3 

1911— Oct.  7  . 
Dec.   20 

1902— Apr.  7   . 
Apr.  21 
June   16 
Nov.  15 

1903— Jan.  1  . 
Apr.  1   . 


4 

4 

4% 

5 

5 

4% 

4% 

iVi 

4 

4 

3% 

3V4 

3% 

4% 

4 

4% 

5 

5% 

6 

6>/2 

6 

5% 

51^ 
5% 
51/^ 
4% 
4V^ 
3% 
4  j 
4%  I 

*4     I 

5 

3% 
*3% 

4% 

4y2 

4% 
4% 

4y2 

4% 

4y2 
4y2 

4% 
3% 
3% 
4% 
5 

5y2 

5% 


4% 

4 

4 

4y2 

5 

5 

4' 

4% 

414 

4 

4 

31^ 

314 

3% 

4y2 

4 

4% 

5 

5V^ 

6 

evz 

6 

5y2 
5 


4y2 


5 
3y2 

*3y2 
4y2 
4% 
4y2 
4y2 
4y2 
4y2 
i% 

4y2 
4y2 
3y2 

3>^ 

4% 
5 

5% 

6 


1 

File  No. 

4y, 

4y2 

4y2 

3y2 

427 

3% 

3% 

3% 

3y4 

436 

3% 

3% 

3% 

3 

444 

4y4 

4y4 

4y4 

31/4 

454 

4% 

4% 

4% 

3% 

457 

4% 

4% 

4% 

3% 

470 

4y, 

4y2 

4y2 

3% 

484 

4y4 

4y4 

4y4 

3y4 

487 

4 

4 

4 

3 

491 

4 

4 

4 

3 

494 

3% 

3% 

3% 

3 

501 

3V4 

3% 

3y4 

3 

506 

3 

3 

3 

3 

508 

3y4 

3y4 

3y4 

3 

516 

4y4 

4y4 

4y4 

4 

520 

3% 

3% 

3% 

3 

580 

m 

4% 

414 

3y2 

537 

4% 

4% 

4% 

3% 

545 

5y4 

5y4 

5y4 

4 

549 

5% 

5% 

5% 

4y2 

552 

ey* 

6% 

6y4 

5 

557 

5% 

5% 

5% 

4y2 

559 

5y4 

5y4 

5y4 

4 

563 

4^, 

4% 

4% 

3y2 

566 

0 

5y4 

5y4 

3% 

571 

5y4 

5y2 

5% 

4 

587 

5 

5y4 

5y4 

3% 

591 

4y4 

4y4 

4% 

3% 

626 

3% 

4y4 

4y4 

3% 

684 

3 

3y2 

3% 

3 

712 

3i/<. 

3% 

3% 

3y4 

723 

3% 

4y4 

4y4 

3% 

726 
I.  C.  C.  No. 

'3% 

*3% 

*3% 

*3% 

2 

5 

5 

5 

4 

2 

4y4 

4% 

4% 

3y2 

163 

2% 

2% 

3y4 

21/2 

225 

•2% 

*2% 

*3y4 

•2V2 

226 

4 

4 

2y2 

226 

4 

4 

2y. 

229 

4 

4 

2y2 

307 

4 

4 

3 

345 

4 

4 

3y4 

351 

4y4 

4y4 

31^ 

363 

4y4 

4y4 

3 

395 
I.  C.  C.  No. 

4y4 

4y4 

3y4 

406 

4y4 

4y4 

31/2 

S.  1-406 

4y4 

4y4 

3y2 

422 

4y4 

4y4 

3% 

S.  1-422 

4y4i 

4y4 

3% 

3636 

4y, 

4% 

4% 

3y2 

3822 

5 

5y4 

5y4 

4 

3876 

5 

sy* 

5y4 

4 

4113 

4 
15 
21 
29 
32 
2 
10 
13 
16 
19 
22 
24 
26 
28 
31 
38 
43 
48 
51 
54 
.58 
60 
63 
66 
3 
8 
11 
4 
3 
5 
7 
9 
C.  C.  No. 
2 

2 

163 

22") 

226 

226 

229 

307 

345 

351 

363 

395 

I.  C.  C.  No. 

406 

S.  1-406 

422 

S.  1-422 

3636 

3822 

3876 

4113 


*Id  cargo  lot.s-,  oats  10,000,  other  grain  8,000  bushels. 


MEMORANDUM  :     DIFFERENTIAL    RATES 


\To 


Statement  showing  changes  in  rates  on  grain,  ex-La'ke,  domestic,  from  Fail  port, 
Ohio,  to  Baltimore,  Md.,  etc. — Continued. 


DATES. 


FROM  FAIRPORT,   OHIO,   TO 

BALTIMORK, 

MD. 

--^ 

o 

X! 

^ 

CO 

vi 

y-s 

^.^ 

^v 

(S 

^ 

CO 

• 

o 

x; 

£ 

-a 

^ 

o 

S? 

4J 

OJ 

>. 

'^^ 

w 

Cj 

v; 

a 

C3 

O 

? 

a 

P. 

n 

O 

K 

O 

TARIFFS. 


6 

y. 

c 

O 

C/J 

o 

Vv 

y, 

s 
s 

•3 
C3 

o 

O 

o 

W 

(Via  Pittsburgh  and  Western  Railway  and  Baltimore  and  Oliio  Railroad.) 
EXPORT. 


18E)7— Mar.  l'>  

1899— May   l.i   

Aug.    2    

Sept.   25    

Oct.   7    

Nov.    1    

Nov.    6    

Nov.    ti    

Nov.   6    

190O-Mar.    15    

Nov.   12    

Dec.  8   

1901— Apr.  2   

-Tune   1    

Oct.  1    

1902— June   20    

Sept.   1    

1903— Jan.  1   

Mar.  10  

May   4    

Sept.   15    

Nov.  16  

1904— Jan.  1   

Apr.  30  tJ  date 


,, 

,^ 

4y4 

4% 

434 

3y2 

SVz 

31/2 

2% 

2% 

SVi 

2y2 

*3y2 

*3y2 

*2% 

*3 

♦3 

*.-> 

*4V^ 

*4y2 

*3% 

*4 

*4 

*2^A 

*3V^ 

*3i^ 

♦3 

*3y4 

*3y4 

*2V* 

*5 

*5 

*41/4 

*4y2 

*4y2 

*'Z 

*6 

*6 

*5y4 

*W2 

*5y2 

*3 

■"5 

*n 

*4y4 

*4y2 

*4y2 

*3 

fi 

6 

5y4 

5y2 

5y2 

3 

»3 

*3 

*2y2 

*2% 

*2% 

*2 

*i 

•4 

*3y2 

*3% 

*3% 

*3 

*W2 

♦4y2 

♦4 

*4y4 

*4y4 

*3% 

*i 

*4 

*3y2 

*3% 

♦3% 

*3 

*3% 

*3% 

*3 

*3i4 

*3y4 

*2y2 

*4V4 

*iV4. 

*3% 

*4 

*4 

*33/4 

*3y2 

*3y2 

*3y4 

*3y4 

*3y4 

*3 

4.1(1 

4.10 

3.60 

3.85 

3.85 

3.10 

4.60 
4.60 
4.60 

4.60 
5.10 
4.60 

4.10 
4.10 
4.10 

4.35 
4.35 
4.35 

4.35 
4.35 
4.35 

3.60 
3.60 
3.60 

3.60 
4.10 
4.«) 

3.60 
4.10 
4.60 
3.60 

3.10 
3.60 
4.10 
3.10 

3.35 
3.85 
4.35 
3.35 

3.35 
3.85 
4.35 
3.35 

2.60 
3.10 
3.60 
2.60 

3.60 

P.  and 

163 

220 

S.  1-229 

S.  2-229 

S.  3-229 

S.  4-229 

S.  5-229 

261 

261 

306 

340 

347 

382 

392 

405 

B.  and 

3642 

3730 

3871 

4002 

4204 

4398 

44.57 

S.  1-4457 

4460 


.  Rwy. 

163 

229 

S.  1-229 

S.  2-229 

S.  3-229 

S.  4-229 

S.  5-229 

261 

261 

306 

340 

347 

382 

392 

405 

R.  R. 

3642 
3730 
3871 
4092 
4204 
4398 
4457 
S.  1-4457 
4460 


*In  cargo  lots,  oats  10,000,  other  grain  8,000  bushels. 


'A 

s 

Rye.   Oats. 

s 

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IN  THE  MATTER  OF  DIFFERENTIAL  FREIGHT  RATES  TO 
AND  FROM  NORTH  ATLANTIC  PORTS. 

11  I.  C.  C.  13. 


283 


IN  THE  MATTER  OP  DIFFERENTIAL  FREIGHT  RATES  TO 
AND  FROM  NORTH  ATLANTIC  PORTS. 

Decided  April  27,  1905. 

(11  L  C.  C.  13.) 

Rates  on  freight  articles  from  tlie  West  to  Baltimore,  Philadelphia  and  Boston  are 
adjusted  according  to  the  following  differentials  below  or  above  the  rates  to 
New  York :  Domestic  traffic — 3  cents  less  to  Baltimore  and  2  cents  less  to 
Philadelphia ;  7  cents,  first  class,  to  2  cents,  sixth  class,  more  to  Boston.  Ex- 
port traffic — same  as  domestic  traffic  to  Baltimore  and  Philadelphia,  except  on 
grain  and  iron  and  steel  articles,  which  are  IVj  cents  less  to  Baltimore  and  1 
cent  less  to  Philadelphia ;  same  rates  to  Boston  as  to  New  York  on  this  traffic. 
On  ex-lake  grain  received  at  Buffalo,  Fairport  and  Erie,  there  is  pending  the 
disposition  of  this  case,  a  differential  in  favor  of  Baltimore  of  4-10  of  a  cent 
per  bushel  below  tlie  rate  to  New  York,  but  no  dift'erential  in  favor  of  Phila- 
delphia. It  was  contended  by  New  York  and  Boston  that  the  differentials 
favoring  Baltimore  and  Philadelphia  should  be  abolished.  Upon  voluntary 
submission  of  the  controversy  to  the  Commission  by  all  parties,  domestic  traffic 
was  excluded  from  consideration.  For  reasons  stated  no  opinion  is  expressed 
concerning  the  relative  rates  on  import  traffic.  With  respect  to  exjjort  differ- 
entials,— 

Held:    1.  That  the  differential  per  100  pounds  on  flour,  all-rail  and  lake  and 
rail,  should  be  reduced  to  2  cents  at  Baltimore  and  1  cent  at  Philadelphia. 

2.  That  the  existing  differential  on  ex-lake  grain  should  be  reduced  to  3-10 
of  a  cent  per  bushel  and  be  allowed  both  to  Baltimore  and  Philadelphia. 

3.  That  otherwise  the  present  export  differentials  should  remain  in  force. 

John  G.  Carlisle,  Ben.  L.  Fairchild  and  Abel  E.  Blackmar  for  New 
York  Commercial  Interests. 

C.  S.  Hamlin  for  Boston  Commercial  Interests. 

Silas  W.  Pettit  for  Philadelphia  Commercial  Interests. 

[14]  Arthur  Geo,  Brown  and  John  B.  Daish  for  Baltimore  Com- 
mercial Interests. 

Nathan  Guilford  for  N.  Y.  C.  &  H.  R.  R.  R.  Co. 

Geo.  v.  Massey,  Francis  I.  Gowcn  and  John  B.  Thaijrr,  Jr.,  for  P.  R. 
R.  Co. 

Hugh  L.  Bond  and  John  G.  Wilson  for  B.  &  0.  R.  R.  Co. 

J.  D.  Campbell  and  Chas.  Heebner  for  P.  &  R.  Ry.  Co. 

Geo.  F.  Broirnell  for  Erie  R.  R.  Co. 

Walter  W.  Boss  and  B.  D.  Caldwell  for  D.,  L.  &  W.  R.  R.  Co. 

F.  H.  Janvier  and  Frank  H.  Piatt  for  L.  V.  R.  R.  Co. 
John  B.  Kerr  for  N.  Y.,  0.  &  W.  Ry.  Co. 

B.  W.  DeForest  for  C.  R.  R.  of  N.  J. 

E.  L.  Somers  for  N.  Y.,  N.  H.  &  H.  R.  R.  Co. 
Edgar  J.  Bich  for  B.  &  M.  R.  R. 

C.  A.  Hight  for  G.  T.  Ry.  System. 

G.  M.  Bosivorth  for  C.  P.  Ry.  Co. 

285 


286  ATLANTIC    PORT    DIFFERENTIALS 

REPORT  OF  THE  COMMISSION. 

Trout Y,  Com missioner : 

In  the  early  part  of  1904  the  rate  on  wheat  from  Buffalo  to  the 
various  Atlantic  ports  for  export  had  fallen  to  two  mills  per  bushel. 
This  was  owing  to  the  existence  of  a  rate  war  between  the  lines  leading 
from  Buffalo  to  Baltimore,  Philadelphia,  New  York  and  Boston,  grow- 
ing out  of  a  dispute  between  those  lines  as  to  the  proper  relative  rates 
to  those  various  ports.  There  was  very  little  wheat  at  Buffalo  which 
could  move  under  these  rates  and  the  practical  effect  of  the  tariff  dur- 
ing the  winter  and  early  spring  was  not  serious,  but,  as  the  opening 
of  navigation  approached,  it  became  evident  that  this  condition,  if  it 
continued,  would  lead  to  a  general  demor?lization  of  grain  rates  in  all 
parts  of  the  country,  which  would  in  turn  unsettle  commercial  and  in- 
dustrial conditions  so  far  as  they  related  to  the  handling  of  grain,  and 
especially  to  the  manufacture  and  distribution  of  the  products  of  grain. 
For  this  reason  business  interests  both  upon  the  seaboard  and  at  in- 
terior grain  handling  and  milling  points  were  anxious  that  some  ad- 
justment should  be  reached,  and  to  this  end  the  commercial  organiza- 
tions of  Boston,  New  York,  [15]  Philadelphia  and  Baltimore  applied 
by  petition  to  this  Commission,  asking  that  it  examine  the  whole  sub- 
ject of  differential  rates  to  and  from  these  four  cities  and  determine 
Avhether  the  present  differentials  should  be  abolished,  or,  if  retained, 
modified. 

It  seemed  to  us  that  the  gravity  of  the  situation  at  least  justified  a 
full  investigation.  A  proceeding  of  inquiry  was  accordingly  insti- 
tuted April  11,  1904,  and  hearings  were  held  at  New  York,  Philadel- 
phia and  Washington.  The  commercial  interests  of  these  cities,  to- 
gether with  those  of  Boston,  assumed  the  burden  of  conducting  the  pro- 
ceedings, but  many  organizations  at  various  interior  points  were  rep- 
resented, as  well  as  all  of  the  railway  lines  involved.  Nearly  three 
thousand  pages  of  typewritten  testimony  have  been  taken,  a  great 
number  and  variety  of  exhibits  have  been  introduced,  and  extended 
written  and  oral  arguments  have  been  made.  We  are  now  required 
to  examine  this  record  with  a  view  to  expressing  some  opinion  in  the 
premises. 

The  order  of  the  Commission  was  sufficiently  broad  to  include  the  ap- 
plication of  these  differentials  to  all  kinds  of  traffic  to  and  from  the 
several  ports,  but  by  agreement  at  the  opening  of  the  first  hearing  the 
inquiry  has  been  limited  entirely  to  export  and  import  traffic.  The 
question  presented  is  not  a  new  one  and  perhaps  there  is  no  way  in 
which  the  exact  nature  of  that  question  can  be  better  understood  than 
by  a  brief  resume  of  w^hat  has  already  occurred. 


IN  THE  MATTER  OF  DIFFERENTIAL  RATES  287 

The  development  of  our  agricultural  resources  in  the  West  has  for 
many  years  produced  a  large  surplus  of  grain  over  that  required  for 
domestic  consumption  and  this  grain  has  sought  a  market  in  European 
countries.  In  the  early  70  's  most  of  the  commerce  between  the  United 
States  and  Europe  was  through  the  four  ports  involved  in  this  pro- 
ceeding, more  especially  through  New  York.  The  New  York  Cen- 
tral lines  reached  Chicago  in  1852;  the  Erie  and  Pennsylvania  soon 
afterwards,  and,  in  1874  the  Baltimore  &  Ohio  first  entered  Chicago 
over  its  own  rails.  This  grain  could  be  transported  through  any  one 
of  the  four  ports  and  the  port  of  export  determined  the  rail  line  which 
should  carry  it  to  the  seaboard.  The  Erie  and  New  York  Cen-  [16] 
tral  served  New  York  i:)rimarily ;  the  Pennsylvania,  Philadelphia,  and 
the  Baltimore  &  Ohio  the  port  of  Baltimore. 

]\Ir.  Fink  states  in  his  report,  which  is  subsequently  referred  to,  that 
in  1881  seventy-tliree  per  cent,  of  the  entire  tonnage  carried  by  these 
lines  of  railway  from  the  West  to  these  four  cities  was  grain,  and  this 
percentage  must  have  been  even  larger  ten  years  before.  The  distribu- 
tion of  that  traffic  between  the  different  lines  was,  therefore,  a  matter 
of  the  greatest  consequence  to  these  railways  and  seems  to  have  been 
from  the  first  a  source  of  bitter  controversy.  The  Baltimore  &  Ohio 
insisted  that  the  distance  to  Baltimore  was  much  less  than  to  New  York 
and  that  for  this  reason  the  rate  should  be  lower.  It  also  seems  to  have 
been  true,  in  those  days,  that  the  ocean  rate  from  Baltimore  and  Phila- 
delphia was  much  higher  and  the  ocean  facilities  much  poorer  than 
from  New  York.  To  obtain,  therefore,  a  part  of  this  traffic  it  was  es- 
sential that  the  inland  rate  should  be  lower  to  Baltimore  and  Philadel- 
phia than  to  New  York. 

The  first  differential  of  which  we  have  any  accurate  account  was  ten 
cents  per  one  hundred  pounds,  but  this  seems  to  have  been  reduced  as 
early  as  1870  to  five  cents  per  hundred  on  grain.  The  New  York  lines 
insisted  that  even  this  was  too  great  and  finally,  after  numerous  rate 
wars,  an  agreement  was  made  in  1876  that  rates  to  Baltimore,  Phila- 
delphia and  New  York  should  be  established  upon  the  basis  of  actual 
distance  from  the  point  of  origin  to  the  several  ports.  This  agreement 
continued  in  effect  only  six  weeks,  the  New  York  lines  withdrawing  at 
the  end  of  that  period  upon  the  ground  that  the  rates  so  established 
were  unduly  favorable  to  Baltimore  and  Philadelphia. 

Another  period  of  rate  disturbance  now  ensued  which  was  termi- 
nated by  an  agreement  dated  April  5,  1877.  This  agreement  was  in 
Avriting  and  was  signed  by  the  New  York  Central,  the  Erie,  the  Penn- 
sylvania and  the  Baltimore  &  Ohio.  Considerable  discussion  has 
arisen  in  the  COnrse  of  this  investigation  as  to  the  proper  mode  of  es- 


288  ATLANTIC    PORT   DIFFERENTIALS 

tablishing  these  differentials.  The  New  York  and  Boston  interests  con- 
tend that  the  inland  rate  should  be  so  adjusted  that  when  combined 
with  the  ocean  rate  the  through  rate  from  the  point  of  origin  to  the 
point  of  destination  will  be  the  same  through  all  the  ports,  while  Bal- 
timore and  Philadel-  [17]  phia  insist  that  this  method  of  rate  adjust- 
ment would  be  unfair  to  those  localities.  As  bearing  upon  this,  the 
view  which  was  taken  of  this  matter  in  the  earlier  days  of  the  contro- 
versy is  interesting.  The  first  paragraph  of  the  agreement  may  be 
cited : 

"To  avoid  all  future  misunderstandings  in  respect  to  the  geo- 
graphical advantages  or  disadvantages  of  the  cities  of  Baltimore, 
Philadelphia  and  New  York,  as  affected  by  rail  and  ocean  trans- 
portation, and  with  the  view  of  effecting  an  equalization  of  the  ag- 
gregate cost  of  rail  and  ocean  transportation  between  all  competi- 
tive points  in  the  west,  northwest,  and  southwest,  and  all  do- 
mestic or  foreign  ports  reached  through  the  above  cities;  it  is 
agreed : ' ' 

This  agreement  provided  that  export  rates  to  Boston  should  be  no 
higher  than  those  to  New  York ;  that  rates  to  Philadelphia  should  be 
two  cents,  and  to  Baltimore  three  cents  per  one  hundred  pounds  lower 
than  to  New  York  upon  all  classes  and  commodities.  The  above  ex- 
tract shows  that  the  purpose  of  the  signatory  parties  was  to  produce 
the  same  through  rate  via  all  the  ports  and  that  these  differentials  were 
established  upon  the  theory  that  they  would  produce  this  effect. 

The  agreement  of  1877  provided  that  any  one  of  the  parties  might 
withdraw  by  giving  three  months'  notice,  and  in  the  year  1880  this 
notice  was  given  by  the  New  York  Central.  A  period  of  disturbance 
again  ensued  and  the  matter  seems  to  have  been  referred  for  solution 
to  Albert  Fink,  Commissioner  of  the  trunk  lines,  who  made  an  elabo- 
rate report.  This  report  of  Mr.  Fink's  is  a  most  luminous  discussion 
of  the  entire  subject  and  must  be  a  classic  to  every  one  interested  in 
this  problem.  His  conclusion  was  that  there  should  be  a  lower  inland 
rate  to  Baltimore  and  Philadelphia  than  to  New  York,  but  that  it  was 
impossible  to  say  with  any  certainty  what  the  differentials  ought  to  be 
or  what  their  effect  upon  properly  competitive  traffic  was.  He  recom- 
mended that  the  lines  seek  to  divide  this  traffic  at  its  source  rather  than 
attempt  to  control  it  by  differential  rates. 

The  report  of  Mr.  Fink  (ante,  p.  5)  does  not  seem  to  have  settled 
the  controversy  and  in  the  spring  of  1882  the  whole  subject  was  re- 
ferred [18]  to  the  arbitration  of  Senator  Thurman,  ex-Senator  Wash- 
burne  and  Judge  Cooley.     This  board,  known  as  the  Advisory  Com- 


IN  THE  MATTER  OP  DIFPERENTIAI.  RATES  289 

mission,  organized  soon  after  its  appointment  and  proceeded  to  hear 
statements  and  arguments  at  the  various  ports  and  also  at  different  in- 
land points.  Its  report  {ante,  p,  69),  made  July  20,  1882,  stated  that 
distance  could  not  be  relied  upon  to  determine  these  differentials,  nor 
could  cost  of  service  be  made  the  test.  The  opinion  was  expressed  that 
some  differential  must  be  accorded  Baltimore  and  Philadelphia  and 
that  the  proper  measure  of  that  differential  was  the  actual  result  of 
competition.  Since  competition,  acting  through  several  j^ears,  had 
brought  about  the  differentials  then  in  force  the  Commission  recom- 
mended that  they  should  be  observed  for  the  present. 

The  agreement  of  1877  had  been  intended,  as  already  seen,  to  equal- 
ize the  ra<tes  through  the  different  ports,  the  lower  inland  rate  being 
supposed  to  correspond  to  the  higher  ocean  rate.  The  New  York  lines 
withdrew  from  this  agreement  upon  the  plea  that  while  ocean  rates  had 
been  distinctly  higher  from  Baltimore  and  Philadelphia  in  1877,  they 
had  become  in  1880  practically  the  same. 

Both  Mr.  Fink  and  the  Advisory  Commission  found  that  ocean  rates 
were  higher  from  Baltimore  and  Philadelphia  than  from  New  York 
and  attached  much  importance  to  this  fact,  but  a  careful  reading  of 
these  reports  apparently  shows  that  in  the  opinion  of  their  authors 
difference  in  ocean  rates  was  not  the  only  factor  which  should  be  con- 
sidered, partly  for  the  reason  that  it  was  impossible  to  determine  ex- 
actly Avhat  the  ocean  rate  was,  and  partly  because  the  thing  to  he  equal- 
ized Avas  not  the  rate  but  the  advantages  of  transportation  through  the 
several  ports. 

The  various  differentials  in  effect  at  the  time  of  the  award  of  the 
Advisor}^  Commission  have  for  the  most  part  continued  down  to  the 
present  day  and  we  may  conveniently  state  at  this  point  what  these  are. 

As  already  said,  rates  upon  export  traffic  through  the  port  of  Boston 
have  always  been  and  now  are  the  same  as  those  through  the  port  of 
New  York.  Domestic  rates  have  been  and  are  higher  to  Boston  than 
to  New  York.  In  1882  these  differentials  on  [19]  domestic  traffic  to 
Boston  were,  in  cents  per  hundred  pounds,  upon  the  various  classes : 


Classes  

1 

2 

3 

4 

5 

6 

Differentials 

10 

6 

5 

5 

5 

5 

In  1892  complaint  was  made  to  the  Interstate  Commerce  Commis- 
sion that  these  differentials  were  excessive.  The  Commission  after 
hearing  ordered  them  reduced,  Kemhle  v.  Lake  Shore  d-  Michigan 
Southern  By.  Co.,  5  I.  C.  C.  Rep.  ^QQ,  {ante,  p.  137),  and  in  August  of 
that  year  the  following  differentials  were  established  and  are  now  in 
effect : 

Classes 1  2  3  4  5  6 

Differentials 7  6  5  4  3  2 

19 


290  ATLANTIC    PORT   DIFFERENTIALS 

Commodity  rates  are  in  general  two  cents  above  the  corresponding  rate 
to  New  York. 

Both  export  and  domestic  rates  were  in  1882  on  all  classes  and  com- 
modities two  cents  per  one  hundred  pounds  lower  to  Philadelphia  and 
three  cents  per  one  hundred  pounds  lower  to  Baltimore  than  to  New 
York.  These  differentials  continued  in  effect  from  1882  down  to  1897 
without  any  formal  attempt  to  alter  them.  While  the  rates  themselves 
were  not  generally  maintained  and  while  the  differentials  were  not  al- 
waj's  recognize-d.  they  stood  upon  the  published  tariff.  In  1897  the  New 
York  Produce  Exchange  filed  with  the  Interstate  Commerce  Commis- 
sion a  petition  against  the  Baltimore  &  Ohio  Kailroad  Company,  and 
other  lines,  alleging  that  the  effect  of  these  differentials  was  an  undue 
discrimination  against  the  locality  of  New  York.  The  complaint  was 
investigated  at  great  length  and  elaborately  discussed  by  the  Commis- 
sion in  its  report.  The  conclusion  arrived  at  was  that  while  the  dif- 
ferentials might  be  unfair  as  between  the  different  railway  lines  in- 
terested or,  possibly,  as  between  the  communities  themselves,  they  were 
not  in  principle  a  violation  of  the  Act  to  Regulate  commerce  and  had 
not  resulted  in  such  an  effect  upon  the  movement  of  traffic  as  would 
justify  the  Commission  in  pronouncing  them  an  undue  preference 
against  the  port  [20]  of  New  York.  This  case  is  reported  in  7  I.  C.  C. 
Rep.  612  (ante,  p.  157),  and  may  be  referred  to  for  a  fuller  discussion 
of  the  questions  involved  than  will  be  attempted  in  this  connection. 

The  differentials  in  effect  in  1 898,  when  the  report  in  the  above  case 
was  promulgated,  were  the  same  that  they  had  been  in  1882,  but  in 
February,  1899,  differentials  on  export  grain  w^ere  reduced  one-half, 
and  in  1904  export  rates  on  iron  and  steel  articles  were  materially  re- 
duced to  stimulate  foreign  consumption  of  our  surplus  production,  and 
in  that  connection  the  differentials  on  this  traffic  were  also  cut  in  two. 
Domestic  differentials  on  grain  and  iron  articles  were  not  affected  and 
are  still  two  cents  at  Philadelphia  and  three  cents  at  Baltimore. 

Upon  westbound  traffic  the  same  differentials  have  been  in  effect 
since  tariffs  were  first  filed  with  the  Commission  in  1887.  Rates  are  in 
cents  per  one  hundred  pounds  less  from  Philadelphia  and  Baltimore 
than  from  New  York,  as  follows : 

Classes 1  2            3             4             5  6 

From  Philadelphia  ...              6  6              2              2              2  2 

From  Baltimore 8  8             3             3             3  3 

From  Boston,  westbound,  rates  are  the  same  as  from  New  York. 

The  main  controversy  before  us  is  over  the  eastbound  differentials 
upon  export  traffic.  Baltimore  and  Philadelphia  insist  that  they  are 
entitled  to  these  differentials  on  the  score  of  location.     They  urge  that 


IN  THE  MATTER  OF  DIFFERENTIAL  RATES  291 

they  are  nearer  the  points  of  origin  of  this  traffic  than  is  New  York 
and  that  for  this  reason  they  should  have  a  lower  inland  rate. 

The  territory  to  which  these  difiPerentials  apply  is  bounded  on  the 
East  by  a  line  from  Buffalo  to  Pittsburgh ;  on  the  South  by  the  Ohio 
River ;  on  the  West  by  the  ]\Iississippi  River,  and  on  the  North  by  the 
Great  Lakes  and  a  line  running  from  Chicago  nearly  due  west  to 
Dubuque,  Iowa.  In  making  rates  between  points  in  this  territory  and 
the  cities  in  question  Chicago  is  treated  as  a  base.  Other  points  take 
either  the  same  rate  as  Chicago  or  one  which  is  a  certain  per  cent, 
above  or  below.  Thus  the  rate  from  Indianapolis  is  93  per  cent,  and 
from  East  St.  Louis  116  per  cent,  of  the  Chicago  rate.  The  Pennsyl- 
vania Railroad  is  the  short  [21]  line  from  Chicago  to  New  York,  Phila- 
delphia and  Baltimore,  the  distances  by  that  line  being  as  follows : 

To  New  York    912  miles. 

To  Philadelphia ■. 822  miles. 

To  Baltimore   801  miles. 

It  is  plain,  however,  that  this  traffic  does  not  all  originate  at  Chi- 
cago; indeed,  comparatively  little  of  it  actually  originates  there  al- 
though large  quantities  pass  through  Chicago  and  Chicago  junctions. 
It  does  not,  therefore,  necessarily  follow  that  Chicago  would  be  a  fairly 
representative  point  in  estimating  the  distance  from  points  of  origin 
to  the  seaboard.  AVherever  the  Pennsylvania  road  is  the  short  line  to 
New  York  the  distance  to  Philadelphia  must  be  ninety  miles  less,  since 
in  all  cases  the  traffic  passes  through  Philadelphia  by  that  line  en  route 
to  New  York.  In  most  cases  where  the  Pennsylvania  is  the  short  line 
to  New  York  it  is  also  the  short  line  to  Baltimore.  These  differentials 
apply  not  only  to  traffic  originating  within  the  territory  above  de- 
scribed, but  to  all  traffic  passing  through  that  territory  on  its  way  to 
the  seaboard.  When  the  location  of  these  different  lines  of  railway  is 
examined  we  think  it  must  be  found  that  while  considerable  of  this 
traffic  may  originate  as  near  to  New  York  as  to  Philadelphia  or  Bos- 
ton, in  case  of  much  of  it  the  difference  in  distance  is  even  greater, 
especially  in  favor  of  Baltimore,  than  would  be  expressed  by  the  rela- 
tive distances  from  Chicago  and  it  is  sufficiently  favorable  to  the  port 
of  New  York  to  find  that  Chicago  is  fairly  representative  in  this  respect 
of  the  various  points  of  origin. 

Whether  these  differences  in  distance  would  justify  a  difference  in 
rate  of  two  cents  in  favor  of  Philadelphia  and  of  three  cents  in  favor 
of  Baltimore,  if  the  rates  were  determined  without  reference  to  com- 
petitive export  conditions,  is  not  altogether  clear.  Such  differences 
would  naturally  be  greater  upon  the  higher  classes  which  bear  higher 
rates  and  less  upon  the  low^er  classes.     Baltimore  introduced  testimony 


292  ATLANTIC    PORT   DIFFERENTIALS 

tending  to  show  that  on  the  basis  of  distance  the  present  rates  did  not 
give  that  locality  anything  like  the  advantage  to  which  it  was  entitled. 
It  must  be  remembered,  however,  that  rates  do  not  ordinarily  increase 
in  [22]  the  same  proportion  as  distance  increases.  If  the  distance 
from  Chicago  to  Baltimore  is  12.2  per  cent,  less  than  to  New  York,  it 
by  no  means  follows  that  the  rate  to  Baltimore  should  be  lower  by  the 
same  per  cent.  Without  attempting  to  examine  this  question  in  de- 
tail, we  are  rather  of  the  opinion  that  the  differentials  now  prevailing 
on  domestic  traffic  are  not  greater  than  they  should  be  if  made  to  Bal- 
timore and  Philadelphia  as  strictly  local  destinations.  Westbound 
differentials  from  Baltimore  and  Philadelphia  are  the  same  on  the 
lower  classes,  and  somewhat  more  on  the  higher  classes  than  these  east- 
bound  differentials.  , 

It  must  be  evident  that  distance  is  properly  regarded  as  a  factor  in 
rate-making,  mainly  because  it  is  supposed  to  express  difference  in  the 
cost  of  service.  Other  things  being  equal  it  costs  more  to  haul  traffic 
],000  miles  than  900,  and  therefore  a  higher  rate  may  be  properly  im- 
posed. ^Manifestly,  however,  this  is  not  always  the  case.  The  grades 
by  the  New  York  Central  lines  between  Chicago  and  New  York  are 
easier  than  those  by  the  Pennsylvania  and  it  is  quite  conceivable  that 
the  actual  cost  of  transportation  over  the  longer  haul  might  be  less 
than  over  the  shorter,  and  in  that  event  New  York,  while  more  distant 
in  geographical  miles,  might  be  nearer  in  transportation  facilities. 
Nothing  of  all  that  need  be  considered  by  us.  There  is  no  testimony  in 
this  record  which  attempts  to  show  the  relative  cost  of  handling  this 
traffic  from  Chicago  to  the  different  ports  and,  indeed,  as  said  by  the 
Advisory  Commission  in  1882,  the  elements  which  enter  into  the  de- 
termination of  that  question  are  so  complex  and  so  various  as  to  render 
it  impossible  of  satisfactory  solution. 

There  is,  however,  one  element  of  cost  which  was  somewhat  insisted 
upon,  viz.,  the  lighterage  charges  at  the  port  of  New  York.  Export 
traffic,  which  need  alone  be  considered  in  this  connection,  is  usuallj- 
lightered  to  the  ship's  side  in  New  York  harbor.  Grain,  for  example, 
is  unloaded  from  the  car  into  an  elevator,  from  the  elevator  transferred 
to  a  barge,  which  is  then  towed  to  the  ship's  side  and  the  grain  trans- 
ferred into  the  hold  of  the  vessel  by  a  floating  elevator.  At  Baltimore, 
Philadelphia  and  Boston,  the  grain  is  usually  loaded  directly  from  the 
elevator  into  [23]  the  vessel,  thereby  avoiding  the  expense  of  lighter- 
age. The  New  York  rate  includes  a  delivery  at  the  ship's  side;  the 
rate  to  the  other  ports  includes  a  delivery  ordinarily  into  the  elevator. 
The  railroad  terminating  at  New  York  is  therefore  compelled  to  bear 
the  expense  of  this  additional  service.     Just  how  much  that  expense 


IN  THE  MATTER  OF  DIFFERENTIAL  RATES  293 

may  be  does  not  appear.  An  allowance  of  three  cents  per  hundred 
pounds  on  all  traffic  is  made  to  lines  terminating-  at  New  York  on  ac- 
count of  lighterage,  but  it  is  doubtful  whether  the  expense  of  lightering 
grain  and  other  low  grade  traffic  equals  that  amount. 

As  already  said,  the  contest  in  this  ease  is  over  export  and  import 
traffic.  The  differential  is  important  because  it  tends  to  send  this 
traffic  throug:h  a  particular  port,  and  therefore  over  a  particular  line 
of  railwaj'.  Since  the  thing  in  which  the  exporter  or  importer  is  in- 
terested is  not  simply  the  rail  rate  to  or  from  the  inland  port,  but  the 
entire  through  rate,  it  becomes  necessary  to  examine  the  ocean  as  well 
as  the  inland  portion  of  this  transportation. 

As  previously  noted  the  agreement  of  1877  was  with  a  view  of  equal- 
izing the  entire  through  rate  by  all  the  ports.  It  was  apparently  be- 
lieved at  that  time  that  ocean  rates  from  Baltimore  and  Philadelphia 
v/ere  distinctly  higher  than  from  New  York,  and  the  inland  rate  was 
made  correspondingly  lower.  In  ]880  the  New  York  lines  witlidrew 
from  this  agreement,  for  the  alleged  reason,  as  stated  above,  that  this 
difference  in  ocean  rates  no  longer  existed.  Both  the  Thurman  award 
and  the  report  of  Mr.  Fink,  find,  however,  that  there  still  were  su))- 
stantial  differences  in  that  respect.  New  York  insists  to-day  that  these 
differences  have  entirely  disappeared.  We  are  asked  to  say  that  ocean 
rates  from  Baltimore  and  Philadelphia  are  practically  the  same  as  from 
New  York  and  to  conclude  that,  therefore,  inland  rates  to  the  several 
ports  should  also  be  made  equal. 

The  most  superficial  consideration  of  the  subject  must  show  the  im- 
possibility of  determining  exactly  the  rates  by  water  from  these  ports 
to  foreign  destinations.  An  ocean  rate  is  much  more  subject  to  fluc- 
tuation than  a  rail  rate  would  be  even  if  the  Act  to  Regulate  Com- 
merce did  not  require  the  publication  and  maintenance  of  the  latter. 
When  a  ship  which  is  to  sail  upon  a  par-  [24]  ticular  day  finds  as  tlie 
time  of  departure  approaches  that  its  cargo  is  liable  to  run  short,  it 
will  accept  almost  any  price  for  the  sake  of  obtaining  a  full  load. 
Upon  the  other  hand,  if  offerings  of  freight  are  plenty,  it  may  exact  a 
higher  price  than  it  quoted  at  an  earlier  period.  Hence,  it  often  re- 
sults, indeed,  usually  results,  that  the  same  ship  carries  the  same  com- 
modity at  different  rates.  It  also  results  that  ocean  rates  vary  from 
day  to  day  and  even  from  hour  to  hour.  They  are  higher  from  Phila- 
delphia to-day  and  from  New  York  to-morrow.  Nor  do  the  rates 
actually  charged  correspond  with  those  quoted.  It  is,  therefore,  im- 
possible to  find  with  any  degree  of  confidence  what  the  rates  from  these 
different  ports  have  been.  INIr.  Fink  states  in  his  report  that  for  the 
four  years  from  1877  to  1880,  inclusive,  rates  to  Liverpool  had  been  .98 


294  ATLANTIC    PORT    DIFFERENTIALS 

of  one  cent  per  hundred  higher  at  Philadelphia  and  1.90  cents  higher 
at  Baltimore  than  at  New  York.  The  Advisory  Commission  found 
that  ocean  rates  were  higher  from  Baltimore  and  Philadelphia  than 
from  New  York  by  an  amount  approximating  the  differentials.  When 
this  Commission  examined  the  subject  in  1897  large  quantities  of  grain 
were  exported  in  cargo  lots ;  that  is,  by  vessels  carrying  no  cargo  ex- 
cept grain.  This  business  is  apparently  no  longer  done  to  any  extent 
tlirough  any  of  the  ports.  We  found  that  cargo  rates  were  the  same 
Irom  all  the  ports ;  that  berth  rates  were  lower  at  Boston  than  at  New 
York  by  an  average  of  perhaps  1  cent  per  100  pounds,  and  that  the}^ 
were  higher  at  Philadelphia  and  Baltimore  than  at  New  York  from 
11/^  to  2  cents  per  hundred  pounds. 

A  good  deal  of  testimony  has  been  introduced  upon  this  inquiry 
bearing  upon  the  relative  ocean  rates  from  these  four  points  since  1897. 
This  testimony  shows  that  such  rates  are  often  lower  through  the  out- 
ports  than  through  New  York  and  that  the  reverse  is  often  the  case. 
No  sufficient  reasons  appear  why  the  difference  in  ocean  rates  should 
have  been  less  for  the  seven  years  following  1897  than  it  had  been  for 
the  seven  years  preceding,  and  still  the  testimony  now  before  us  appar- 
ently shows  that  the  difference  is  less  to-day  than  has  been  found  in 
former  investigations.  Boston  no  longer  seems  to  enjoy  quite  the  same 
advantages  as  formerly  and  rates  from  Philadelphia  and  Baltimore 
seem  to  more  nearly  equal  those  from  New  York.  We  [25]  are  satis- 
tied  that  the  difference  is  materially  less  in  case  of  low-class  traffic, 
which  is  mainly  competitive,  than  the  amount  of  the  differentials,  and 
that  is  about  all  that  can  be  averred  with  certainty. 

New  York  and  Boston  claim  that  the  inland  rail  differential  has  been 
in  the  past  responsible  for  any  difference  that  may  have  existed  in 
ocean  rates  and  that  if  this  differential  were  abolished  there  would  be 
no  difference.  In  support  of  this  they  give  evidence  touching  what  is 
known  as  the  "Minimum  Freight  Agreement." 

In  the  fall  of  1901  it  had  become  evident,  in  view  of  the  close  of  the 
war  in  South  Africa  and  the  prospect  of  reduced  exports  from  the 
United  States,  that  a  large  amount  of  unemployed  tonnage  would  be 
thrown  upon  the  market.  For  the  purpose  af  preventing  the  conse- 
quent demoralization  in  ocean  rates  which  was  feared  the  owners  of 
steamship  lines  pljdng  between  ports  in  the  United  States  and  Canada, 
upon  the  one  hand,  and  Great  Britain  and  Ireland  upon  the  other, 
fixed  a  minimum  rate  at  which  certain  commodities  should  be  trans- 
ported. This  agreement  was  made  and  executed  in  London.  It  ap- 
plied, to  grain,  cotton  seed  oil  and  cake,  flour  in  sacks,  and  bacon  and 
hams. 


IN  THE  MATTER  OF  DIFFERENTIAL  RATES  295 

The  mmimum  rates  named  on  these  commodities  were  the  same  from 
all  the  ports.  Since  they  could  be  transported  to  Baltimore  and  Phila- 
delphia for  three  and  two  cents,  respectively,  less  than  to  New  York, 
the  result  of  the  ]\Iinimum  Freight  Agreement  in  its  first  form  was  to 
make  a  total  through  rate  via  Baltimore  and  Philadelphia  less  than  via 
New  York  and  Boston  by  the  amount  of  the  inland  differentials.  The 
effect  of  this  was  to  divert  traffic  from  the  two  latter  ports,  and  so  pro- 
nounced was  this  diversion  that  steamship  agents  in  the  United  States 
representing  lines  principally  interested  in  Boston  and  New  York  pro- 
tested against  its  continuance.  After  investigation  and  conference  the 
agreement  was  so  modified,  taking  effect  May  26,  1902,  that  ocean  rates 
from  the  differential  ports  were  made  higher  than  from  New  York  and 
Boston  by  the  amount  of  the  inland  differential.  The  effect  of  this 
modification  was  to  make  the  rates  through  all  the  ports  from  points 
of  origin  to  destination  exactly  the  same, 

[26]  This  agreement  provided  that  parties  to  it  might  withdraw  a 
portion  or  all  of  their  traffic  from  its  operation  upon  notice,  and  al- 
most immediately  following  May  26,  lines  operating  through  the  dif- 
ferential ports  began  to  give  notice  of  such  withdrawal.  On  June  12, 
the  Johnson  Line  withdrew  tobacco  when  originating  in  Virginia  and 
North  Carolina ;  on  July  16,  certain  Canadian  traffic  through  the  port 
of  Montreal  was  withdrawn ;  on  July  30,  tobacco,  compound  lard  and 
the  products  of  cotton  seed  oil  were  excepted.  On  July  9,  the  John- 
son Line,  operating  to  the  port  of  Baltimore,  gave  notice  that  it  would 
revert  to  the  original  agreement,  by  which  rates  were  to  be  the  same 
from  all  ports,  for  the  alleged  reason  that  under  the  existing  arrange- 
ment it  could  obtain  no  traffic  at  Baltimore. 

It  is  not  material  to  continue  in  detail  our  examination  of  the  opera- 
tion of  this  agreement.  Glucose,  grape  sugar,  tobacco,  lumber  and 
some  other  grain  products  in  addition  to  f^our,  seem  to  have  been  added 
to  those  originally  embraced.  Special  differentials  through  the  diff'er- 
ent  ports  were  agreed  upon  from  time  to  time  upon  almost  all  com- 
modities. For  no  considerable  length  of  time  was  it  true  that  ocean 
rates  from  all  the  ports  were  the  same  nor  that  through  rates  by  all 
the  ports  were  the  same.  As  a  rule,  ocean  rates  were  higher  from  the 
cut-ports  than  from  New  York,  but  not  to  the  full  extent  of  the  differ- 
ential. The  Johnson  Line  appears  to  have  reconsidered  its  withdrawal 
from  the  agreement  upon  being  conceded  a  differential  of  11/2  cents  at 
Baltimore  and  1  cent  at  Philadelphia  upon  flour,  oatmeal,  cotton  seed 
oil,  cotton  seed  cake  and  linseed  meal.  This  was  accomplished  by  al- 
lowing the  lines  from  Baltimore  to  make  a  rate  11/2  cents  and  from 
Philadelphia  1  cent  above  those  from  New  York,  thus  producing  a 


296  ATLANTIC    PORT   DIFFERENTIALS 

through  rate  via  Baltimore  11/2  cents  lower,  and  via  Philadelphia  1 
cent  lower  than  via  New  York, 

Considerable  testimony  was  introduced  as  to  the  effect  of  this  agree- 
ment on  bookings  of  traffic,  but  while  we  have  examined  those  tables 
with  care  they  do  not  apparently  disclose  any  well  settled  fact  which 
justifies  a  finding  or  renders  it  necessary  for  us  to  refer  to  them  in  de- 
tail. The  operation  of  this  freight  agreement  pretty  clearly  demon- 
strated two  things. 

[27]  First :  That  a  through  rate  via  the  ports  of  Philadelphia  and 
Baltimore  less  than  that  via  New  York  by  the  full  amount  of  the  dif- 
ferentials would  unduly  and  unnaturally  divert  traffic  fro2n  the  port 
of  New  York. 

Second :  That  the  maintenance  of  ecpial  rates  through  all  the  ports 
would  divert  traffic  to  New  York  to  a  much  greater  extent  than  it  at 
present  moves  through  that  port.  It  must  be  true,  as  claimed  by  New 
York,  that  the  inland  differential  modifies  the  ocean  rate  but  not  to  the 
full  amount  of  the  differential. 

New  York  offers  facilities  in  the  way  of  ocean  transportation  not 
obtainable  at  any  other  port.  There  are  more  sailings  from  New  York 
than  from  the  out-ports,  and  its  steamship  lines  reach  many  foreign 
ports  which  are  not  served  by  lines  from  Baltimore,  Philadelphia  or 
Boston.  Its  steamships  are  faster  and  larger.  The  enormous  passen- 
ger business  through  the  port  of  New  York,  of  itself,  goes  far  towards 
the  maintenance  of  many  of  these  lines.  Cargoes  of  import  traffic  are 
much  more  easily  loaded  for  New  York  than  for  the  out-ports.  The 
banking  facilities  at  the  port  of  New  York  are  superior  to  those  else- 
where. 

Below  is  a  table  showing  the  number  of  vessels,  together  with  their 
tonnage,  which  entered  and  cleared  at  the  four  ports  during  the  year 
1903: 

Number  Number. 

Entered.  Tonuage.  Cleared.  Tonnage. 

New  York 3,852  9,053,096  3,680  8,847,072 

Boston   1,787  2,978,913  1,515  2,217,543 

Philadelphia   1,123  1,993,422  1,021  1,861,423 

Baltimore    790  1,406,529  715  1,338,888 

New  York  also  has  storage  capacity  for  grain  and  flour  which  is 
much  greater  than  at  the  other  ports.  The  elevator  capacity  of  the 
four  ports  in  bushels  was  given  as  follows : 

New  York 15,730,000 

Boston   4,250,000 

Philadelphia  4,300,000 

Baltimore    5,350,000 


IN  THE  MATTER  OF  DIFFERENTIAL  RATES  •  297 

These  superior  facilities  attract,  first  the  higher  classes  of  freight 
which  move  very  largely  through  the  port  of  New  York,  [28]  but  after 
all  this  has  been  provided  for  there  still  remains  room  available  for 
low  class  freight  at  low  prices,  depending  always  upon  the  supply. 
Broadly  speaking  the  shipper  can  secure  a  better,  more  reliable,  quicker 
and  more  frequent  service  through  the  port  of  New  York,  all  of  which 
tends  to  attract  traffic  to  that  port  at  the  expense  of  Baltimore  and 
Philadelphia  when  the  through  rate  is  the  same.  To  some  extent  this 
is  true  of  Boston,  although  the  ocean  service  from  that  port  is  better 
than  from  either  Philadelphia  or  Baltimore. 

Of  these  four  ports  the  distance  bj'  water  to  the  principal  foreign 
destinations  is  the  shortest  from  Boston ;  the  longest  from  Baltimore 
and  Philadelphia.  The  actual  difference  in  time  occupied  is  from  one 
to  two  days.  For  this  reason  it  is  contended  that  the  cost  of  service 
from  these  two  ports  is  greater  than  from  Boston  and  New  York  and 
that  ships  will  not  frequent  them  at  equal  rates. 

It  is  undoubtedly  true  that  the  time  occupied  from  these  southern 
jjorts  is  longer  and  consequently  that  the  actual  expense  of  propelling 
the  ship  is  greater.  This  item  is  not,  however,  very  considerable  and 
is  to  a  great  extent,  if  not  wholly,  offset  at  the  port  of  New  York  by 
higher  port  charges  and  increased  cost  of  labor.  We  saw  in  the  former 
ease  that  cargo  rates  were  exactly  the  same  from  New  York,  Philadel- 
phia and  Baltimore  and  from  this  it  would  appear  that  the  additional 
cost  cannot  be  much  greater  in  case  of  the  southern  ports.  But  the 
advantage  in  obtaining  cargoes  is  so  much  greater  at  New  York  and 
especially  the  possibility  of  finding  cargoes  abroad  for  New  York  is  so 
much  better  that  at  equal  rates  regular  line  steamers  prefer  the  port 
of  New  York  to  Baltimore  or  Philadelphia,  although  a  tramp  vessel,  in- 
terested only  in  that  voj-age,  makes  either  port  at  the  same  price. 

New  York  undertook  to  show  that  these  differentials  in  fact  diverted 
traffic  from  that  port,  placing  this  both  upon  evidence  of  specific  in- 
stances of  diversion  and  upon  an  examination  of  the  relative  amount 
of  export  traffic  Avhicli  now  passes  through  these  several  ports  as  com- 
pared with  former  years. 

Grain  is  seldom  exported  upon  a  through  bill  of  lading.  It  is 
brought  to  the  seaboard  upon  the  regular  published  export  [29]  rate, 
the  owner  of  the  grain  making  his  own  engagement  for  ocean  carriage 
either  before  or  after  the  arrival  of  the  grain  itself  at  the  port  of  ex- 
port. With  most  other  kinds  of  traffic  this  is  different.  A  prospective 
shipper  applies  to  the  agent  of  a  railroad  company  for  a  through  rate 
from  the  interior  point  to  the  foreign  destination.  The  inland  rate, 
applicable  to  the  movement  of  that  traffic,  is  published  by  the  carrier 


298  ATT.ANTIC    PORT   DIFFERENTIALS 

and  therefore  fixed.  This  agent  now  ascertains  the  ocean  rate  by  com- 
municating with  steamship  agents  representing  the  various  ports. 
Having  learned  from  what  port  the  lowest  ocean  rate  can  be  obtained. 
he  adds  together  this  ocean  rate  and  the  inland  rate  to  that  port  and 
thereby  ascertains  for  his  customer  the  through  rate.  Since  ocean 
rates  are  continually  varying  at  the  ports,  this  through  rate  must  some- 
times be  higher  through  one  port  and  sometimes  through  another.  New 
York  introduced  the  agents  of  various  New  York  lines,  like  the  Erie, 
the  Delaware,  Lackawanna  &  Western,  and  the  New  York  Central,  who 
testified  that  while  they  were  anxious  to  send  business  through  New 
York,  since  their  lines  would  in  that  case  obtain  the  entire  haul  to  that 
point,  they  were  compelled  in  many  instances,  indeed  for  the  periods 
referred  to  in  the  majority  of  instances,  to  bill  those  shipments  through 
various  out-ports  for  the  reason  that  the  rate  through  such  ports 
was  more  favorable.  Upon  the  other  hand  it  was  shown  by  Balti- 
more and  Philadelphia  that  flouring  mills,  for  example,  located  at 
those  two  ports,  frequently  shipped  flour  for  export  to  the  port  of 
New  York,  and  a  representative  of  the  Baldwin  locomotive  works  pre- 
sented a  detailed  statement  showing  that  the  greater  part  of  the  prod- 
uct of  that  company  sold  abroad  was  sent  from  Philadelphia  to  New 
York  at  the  regular  freight  rate  and  there  exported  by  New  York  lines. 

It  is  manifest,  as  already  suggested,  that  the  rate  from  interior 
points  must  make  sometimes  through  one  port  and  sometimes  through 
another.  Single  instances,  or  single  months,  are  of  uncertain  value  as 
determining  the  effect  of  these  differentials.  It  should  be  noticed  thai 
for  still  another  reason  it  is  unsafe  to  compare  one  year  with  another 
even  when  an  entire  year  is  taken.  While  much  of  this  traffic  is 
strictly  competitive,  much  of  it  is  non-competitive,  especially  grain  and 
grain  prod-  [30]  ucts.  Certain  sections  of  country  are  peculiarly  tribu- 
tary to  certain  railroads.  If  the  grain  crop  fails  in  that  section  tribu- 
tary to  the  Baltimore  &  Ohio,  the  exports  of  grain  from  the  port  of 
Baltimore  will  fall  off.  So  too,  the  amount  of  grain  or  flour  exported 
through  the  port  of  New  York  might  depend  largely  upon  the  offerings 
of  other  traffic,  since  it  is  only  when  these  offerings  have  been  exhausted 
that  ships  from  that  port  will  take  grain  at  sufficiently  low  rates  to  ob- 
tain it.  From  all  these  considerations  it  results  that  the  effect  of  this 
differential  upon  the  movement  of  traffic  can  only  be  approximately' 
determined  by  comparing  periods  of  considerable  extent. 

For  the  purpose  of  showing  the  effect  of  these  differentials  upon  the 
movement  of  export  traffic  a  great  mass  of  statistical  information  was 
introduced.  We  have  carefully  examined  these  statistics  and  have  en- 
deavored to  give  them  proper  consideration,  but  they  warrant  no  defi- 


IN  THE  MATTER  OP  DIFFERENTIAL  RATES  299 

nite  finding,  nor  does  it  seem  worth  while  to  encumber  this  report  with 
any  extended  statement  of  them  As  indicating  in  a  general  way  the 
movement  of  this  traffic,  the  following  tables  may  be  referred  to : 

Table  No.  1  shows  the  exports  of  wheat,  corn  and  oats,  in  bushels, 
through  the  four  pQjrts,  Boston,  New  York,  Philadelphia  and  Balti- 
more, with  percentages  in  each  case  to  the  total  group,  from  1878  to 
and  including  1904. 


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304 


IN  THE  MATTER  OF  DIFFERENTIAL  RATES 


305 


Table  No.  2  shows  the  receipts  of  grain  at  New  York  via  canal  and 
rail  yearly  from  1878  to  1903,  inclusive. 

TABLE  NO.  2. 

Total  during  Total  during 

Year.  12  months.  12  months. 

Canal.  Rail. 

1877  47,911,7.54  .34,081,586 

1878  63,663,049  63,960,486 

1879  57,035,507  76,483,604 

1880  69,34.5,829  71,901,088 

1881  38,188,910  73,289,097 

1882  32,148,345  53,672,968 

1883  41,214,293  51,389,834 

1884  37,924,524  48,086,975 

1885  29,926,879  65,563,023 

1886  43,99.5,885  59,200,235 

1887  46,009,200  50,755,235 

1888  •. 34,020,600  40,515,050 

1889  33,994,590  50,434,748 

1890  30,185,400  63,938,068 

1891  31,696,694  96,194,173 

1892 26,780,675  105,111,076 

1893  43,835,800  61,802,966 

1894  43,031,800  42,535,695 

1895  14,690,100  72,778,335 

1896  32,250,050  88,227,725 

1897  21,892,361  132,524,575 

1898  19,407,100  141,623,160 

1899  16,955,900  127,106,575 

1900  11,546,507  108,331,325 

1901  14,427,100  87,922,480 

1902  11,900,350  69,270,959 

,  1903  12,900,100  74,762,884 


Table  No.  3  shows  the  exports  of  wheat,  corn  and  oats  from  the  ports 
of  Montreal,  Portland,  Boston,  New  York,  Philadelphia,  Baltimore, 
Norfolk,  Newport  News,  New  Orleans  and  Galveston,  from  1878  to 
1904,  inclusive,  with  percentages  from  each  port. 


20 


1 


306 


ATLANTIC    PORT   DIFFERENTIALS 
TABLE  NO.  3. 


YEAR. 

MONTREAL. 

PORTLAND. 

BOSTON. 

NEW    YORK. 

PHILADEL'IA. 

.  ..!.... 

53,510,363W 1      8,954,449W| 

— 



26,118,8920    ....|    19,652,8260 

16.5 

Total  Exports 

10,509,509 

6.0 

1,628,393 

.9 

10,502,388 

6.0 

79,629,255      45.6     28,607,275 

60,541, 234Wi 

34,357,0570  j.... 

16,814,572Wi.... 

14,039,2280 

Total  Exports 

22,700,000 

8,221,895W 
7,065,745C 

10.3 

963,891 

.5 

11,057,454 

5.0 

94,898,291     ;43.3 

30,853,800 

14.1 

1880   

5.6 
8.2 

1,041,375W 
1,329,8110 

.9 
1.5 

11,263,798W 
3,275,6650 

7.0 
3.8 

74, 863, 08.3  Wi. 50. 5 
34,646,0890  i40.0 

11, 312,. 590  W 
16,579,6440 

7.7 
19.1 

Total  Exports 

15,287,640 

6.5 

2,371,186 

1.0 

14,539,463 

6.3 

109,509,172 

46.8 

27,892,234 

11.9 

1881    

5, 590, 984 W 
3,209,9680 

6.9 
4.9 

975.294W 
232,8980 

1.3 
.4 

3,162,540W 

8,005,0950 

3.9 
12.3 

,S8.366,18.5W 
27,554,0770 

47.4 
42.3 

8,892, 260W 
6,099,4340 

10.9 
9.4 

Total  Exports 

8,800,952 

6.2 

1,208,283 

.8 

11,168,635 

7.6 

65,920,262 

45.1 

14,991,694 

10.4 

1882   

5,797,1'>5W 
516,2300 

7.8 
4.3 

801, 612 W 
11,9480 

1.0 

2,843,493W 
2,174,3200 

3.8 
17.1 

36,670, 191W 
7,253,8950 

49.6 
60.4 

5,852,9.51W'  7.9 
808,5990     6.7 

Total  Exports 

6,313,387 

7.3 

813,. 560 

.9 

5,017,813 

5.8 

43,924,086 

51.1 

6,661,550 

7.7 

1^  ..: 

3,518,127W 
4,122,1820 

7.1 
7.1 

1,347, 067 W 
296,6700 

2.7 

.5 

1,989,748W 
4,555,0090 

4.0 
8.0 

20, 046, 291 W 

22,849,5200 

40.7*      4,096,297W 
39.6       5,304,9430 

8.3 
9.2 

Total  Exports 

7,640,309 

7.2 

1,643,737 

1.6 

6,544,757 

6.1 

42,895,811 

40.1 

48.0 
34.0 

9,401,240 

8.8 

1881    

3,426,885W 

2,036,0500 

6.1 

7.4 

263, 161 W 
1,283,6000 

.5 
4.7 

1,639,598W 
4,156,4830 

2.9 
15.1 

26,767,296W 
9,492,2000 

5, 566, 173 W 
1,744,2520 

10.0 
6.4 

Total  Exports 

5,462,935 

6.5 

1,536,761 

1.8 

5,796,081 

7.0 

36,256,496 

43.5 

7,310,425 

8.8 

1885    

3,372,160W 
1,94 '5,8980 

10.5 
3.2 

8.54, 538W 
458,. 5810 

2.7 
.7 

1,680,022W 
8,778,8230 

5.3 
6.2 

17,ni,294W 
27,214,1890 

53.4 
44.4 

3,-532, 192  W 
5,929,2440 

11.0 

9  7 

Total  Exports 

5,318,058 

5.7 

1,313,119 

1.4 

5,458,845 

5.8 

44,325,483 

47.5 

9,461,436 

10.1 

1886  

5,885,662W 
3,910,2090 

9.8 
7.3 

960,882W 
411,5550 

1.6 

.8 

2,376,298W 
3,025,6730 

3.9 
5.7 

32,090,610W 
20,996,7050 

.53.0;      6,079,146W 
39.4       1.857.3530 

10.0 
3  5 

Total  Exports 

9,795,871 

8.6 

1,372,437 

1.2 

5,401,971 

4.7 

53,087,315 

46.7 

7,936,499 

7.0 

1887    

7,434,716W 

1,263,1080 

9.2 
3.8 

1,333,456W 
0 

1.7 

3,983,925W 
2  313  9580 

5.0 
V  n 

41,886,049Wi.52.1 
12,396,2720  j37.3 

8,774,174Wil0.9 
1,996,5830  i  6.1 

Total  Exports 

8,697,824 

7.7 

1,333,456 

1.2 

6,297,883 

5.5 

54, 192, .321      47.8 

10,770,757 

9.5 

1888  

2,157,548W 
2,660,0030 

9.6 
8.8 

176,160W 
.  0 

.8 

1,210,666W 
3,245,8200 

5.3 
10.7 

12,609,242W 
14,236,1810 

56.0 
47.0 

949, 844 W 
859,3710 

4.2 
■>  8 

Total  Exports 

4,817,551 

9.1 

176,160 

.3 

4,456,486 

8.5 

26,845,423 

50.8 

1,809,215 

3.4 

1889   

2,356,494W 
6,601,9890 

11.7 
8.5 

w 

"'.8 

459,111W 
7,135,9330 

2.3 
9.1 

10, 784, 303 W 
28,786,9770 

53.6 
36.9 

1,110,606W 
3,640,3160 

5  5 

641,6830' 

4  7 

Total  Exports 

8,958,483 

9.1 

641,683 

.7 

7,595,044 

7.8 

39,571,280 

40.3 

4,750,922 

4.8 

1890   

2,156,807W 

4,849,0240 

210,0009 

9.6 

5.7 
1.9 

65, 21.3  W 

323,3760 

O 

.4 
.4 

525, 287 W 

4,500,7030 

515,8780 

2.3 
5.3 
4.4 

12,569,286W 
24,600,1470 
9,301,0460 

56.0 
29.1 
79.7 

617,876W 
16,735,5210 
12,587 

2.8 
19  8 

11 

1 

Total  Exports 

7,215.831 

6.1 

388,589 

.3 

5, .541, 868 

4.6 

46,470,479 

39.2 

17,365,984 

14.7 

1891       

6,090,114W 

2,173,0700 

744,2870 

6.5 
7.7 
13.2 

7C0,157W 

500 

0 

.8 

2,787, 125WI  3.0 

3,897,5650   13.8 

35,4660       .6 

46, 9.57,1 13  W 
13,180,3930 
3,205,4660 

50.3 
46.5 
56.8 

6, 840,. 503  W 

2,608,6770 

309,8570 

7.3 
9.2 

<< 

Total  Exports 

9,007,471 

7.1 

700,207 

.5 

6,720,096        5.3 

63,342,972 

49.7 

9,759,037 

7.7 

1892       

8.489,698TV 
1,764,8590 
5,020,1400 

7.6 
2.5 
45.4 

l,01O,545W 

Q 

.9 

.50, 81 3, 295  W 
18,786,8010 
3,742,8120 

45.4 
26.1 
33.8 

9, 762, 594 W 

19,779,8760 

446,4780 

8.7 

27.5 

4.0 

2,971,8580 
73.7450 

4.1 

.7 

>i 

0 

Total  Exports 

15,274,697 

7.8 

1.010,545 

.5 

10,547,506 

5.5 

73,342,908 

37.7 

29,988,948 

15.4 

IN  THE  MATTER  OF  DIFFERENTIAL  RATES 
TABLE  NiO.  S— Continued. 


307 


BALTIMORE. 

NEW  ORLEANS 

NORFOLK. 

NEWP'T  NKW.S. 

(Known  as  York 

town  previous  to 

1889.) 

tJALVKSTON. 

TOTALS. 

19,766. 074WI....  .... 

' 

16,543,8120    .... 

265,7950 

2,7370 

36,309,&6      20.8 

7,144,488     j  4.1 

255,795 

.1 

2.737 

174.589,726 

30,869, 104W  .... 

21,1^,4220    .... 

240,6,00 

2,553C 

52,034,526     '23.8 

6,318,605 

2.9 

240,670 

.1 

2,553 

219,059,790 



34,923,ir)2W23.6 

5,5O5,020Wi  4.1 
8,855,5790   10.3 

W 

147,130,913W 
86,549,8000 

14,604,3640    16.9 

192,9030 

.2 

49.527,516      21.2 

14,360,599 

6.2 

192,903 

.1 

233,680,713 

19, 453, 676 W  24.2 

4,349,575Wj  5.4 
7,692,2590  11.8 

8,980W 
263,3160 

456W 
0 

80,799,950W 

12,097.3760   18.5 

.4 

65,155,.514C 

31,551,052      21.5 

12,041,834        8.2 

272,296 

.2 

456 

145  955  464 

17,233,469W  23.5 

4,609,033Wj  6.2 
253,7900  1  2.1 

154,859W      .2 
0 

1,048W 
n 



73,943,811W 
19  11^1  ison 

1,132,4070  i  9.4 

' 

18,365,876      21.4 

4,862,823     |  5.6 

134,859          .2 

1  048      ( . .               Sfi  095  000 

.7 

' 

15,434,689W,31.4 
10,285,8750   17.8 

2,622,717W 
9,856,0410 

5.4 
17.1 

W 

384,1830 

176, 541 W 
c 

.4 

28,043W  .... 
2,6450  |.... 

49,259, 520W 
57,657,0680 

25,720,564      24.0 

12,478,758 

11.7 

384,183 

.3 

176,541 

.2 

30,688 

106,916,588 

16,217.60fl'W  29.1 
4,943,0100    18.0 

1,346, 01 9W 
3,975,6260 

2.4 
14.4 

W 

300C 

535,350W 
c 

1.0 

2,120W 

c 

55,';64,202W 
27,631,5210 

21,160,610     '25. 4 

5,321,645 

6.4 

300 

535,350           .6 

2,120 

83,395,723 

4,581  261Wil4  3 

678  283 W 

<>  1 

W 

21  4S60 

227,165Wi     -7 

32.036,915W 

14,048,2870  22.9 

7,302,9100   11.9 

618,3500 

1.0 

61,317,7630 

18,629,-548      20.0 

7,981,193        8.6 

21,486 

845,515           .9 

93,354,678 

10, 475, 395  Wi  17. 3 

1,041,141WI  1.7 
7,896,3390   14.8 

W 

53,0210 

'"!i 

1,638,250W 
1,962,5980 

2.7 
3.7 

W 

60,547, 384W 

13,138,2290  (24.7 

1,2600 

53,252,9420 

23,613,624      20.7 

8,937,480        7.9 

53,021 

3,600,848        3.2 

1.260      .... 

113,800,326 

11,057,290W  13.7 
7,115,8140  j21.6 

4,299,242WI  5.3 
7,301,0110  22.1 

193,838W 
199,2420 

.2 
.6 

1,501,477W    1-0 

1.... 

80,464, 167W 

505,4810 

1.5 

33,001,4690 

18,173,104      16.0 

11,600,253     ,10.2 

393,080 

.3 

2,006,958        1.8 

113,465,636 

4,082,508W  18.1 
3  741  9140   12  3 

1  027  322W    ^  (^ 

W 

"!3 

322,309Wi  1.4 

22,535,599W 

5,055,5120 

16.7 

82,6740 

427,1100 

1.4 

30,308,5850 

7,824,422      14.8 

6,082,834 

11.5 

82,674 

.2 

749,419 

1.4 

.52,844,184 

4,389,790W,21.8 
16,822,8080  |21.6 

991,184W 
13,469,7540 

4.9 
17.3 

2,982W  .... 
27,9030  j.... 

31, 885 W 
880,2510 

.2 

i!i 

20,126,355W 

78,007,6140 

21,212,596      21.6 

14,460,938 

14.8 

30,885      .... 

912.136 

.9 

98,133,969 

4  8f>3  4.53W  21  4 

1,308,710W 

12,768,4220 

O 

5.8 
15.0 

16  OOOW       1 

365, 643 W 
1,331,2790 
1,006,7020 

1.6 
1.6 
8.6 

W 

"i 

22,428,2('5W 

19,447,1440   23.0 
617,0530  j  5.3 

22,7280 
o 

36,0120 

o 

84,614,3560 
11,663,2660 

24,867,650      20.9 

14,077,132 

11.9 

38,728      .... 

2,703,624 

2.3 

36,012     i.... 

118,705.897 

15,673, 334W  16.8 

3,852,9110   13.6 

5480  1 

10,497,  now 

1,843,8690 

o 

11.2 
6.5 

1,492, 024 W 

83,617C 

0 

1.6 
.3 

1,814,024W 

682,2600 

1,345,4870 

1.9 

2.4 

23.9 

587,395W 

12,7410 

O 

.6 

93, 438, 899 W 

28,335,1530 

5,641.0510 

19,526,793      15.3 

12,340,979 

9.7 

1,575,641 

1.2 

3,841,771 

3.0 

600,136 

.5 

127,415.103 

16,567,652W  14.8 

19,707,2.57c  27.4 

172  2710     1  6 

14,4.50,811W 

7,044,0440 

0 

12.9 
9.8 

628,247W 

598,5520 

0 

.6 

.8 

2,323, 824W 
1,026,0980 
1,604,3290 

2.1 
1.6 
14.5 

377,885W 

144,7750 

O 

.31      111,926,454W 

.2        71,824,1200 
....j        11,059,7750 

36,447,180      18.7 

21,494,855 

11.0 

1,226.799 

.6 

4,954,251 

2.5 

522,660 

.3 

194,810.349 

308 


ATLANTIC    PORT   DIFFERENTIALS 
TABLE  NO.  3 — Continued. 


YEAR. 

MONTREAL. 

PORTLAND. 

BOSTON. 

NEW    YORK. 

PHILADEL'IA. 

jg93            

6,909,337w|  7.9 
9.6W,544C  20.0 
3,119,2400  31.6 

1,050,049W 

24,7050 

0 

1.2 

5,275,276W 

5,241,1700 

3,6510 

6.0 
10.9 

38,047,932W 
12,802,0890 
5,197,0070 

43.7 

26.6 
52.6 

5,723,510W 

3,865,6330 

103,4000 

6.6 

••      

Total  Exports 

19,679,131      13.5 

1,074,754 

.7 

10,520,097 

7.3 

56,046,978 

38.6 

9,692,543 

6.7 

1894       

5,337, 455W    9.7 

1,969,417C     5.0 

77,5690  16.7 

395,961W 

623,5780 

O 

.7 
1.6 

5,812,828W 

3,^3,6350 

2,3500 

10.5 

9.7 

.5 

25,141,494W 

11,406,7110 

382,8050 

45.6 
28.9 
82.8 

4,487,496W 

2,577,5400 

1690 

8.2 

6.5 

"      

Total  Exports 

7,384.441        7.8 

1,019,539 

1.1 

9,638,813 

10.1 

36,931,010 

38.8 

7,065,205 

7.4 

3,795,00OW    8.7 

2,4.58,0000  i  4.1 

10,7500       .6 

W 

'".8 

7,380, 391W 

5,281,0690 

1,5200 

16.9 

8.9 

.1 

24,554,7.58W 
19,693,4710 
1,497,5870 

56.2 
33.2 
82.8 

1,885,598W 

3,140,9200 

59,4200 

4.3 

456,5050 
0 

5.3 



3.3 

Total  Exports 

6,263,750       6.0 

456,. 505 

.4 

12,662,980 

12.1 

45,745,816 

43.'. 

5,085,938 

4.8 

1896   

6,877, 846W  12.0 

73,322W 

565,8360 

0 

.1 
.5 

9,781,250W 
5,990,3970 
1,919,6770 

17.1 
4.9 
6.1 

21,766,950W 
18,801,7940 
15,880,1500 

38.0 
15. £ 
50.4 

4,902,181W    8.6 

6,658,9440 
2,631,7850 

5.5 
8.3 

8,934,4020     7.4 

"      

438,8240     1.4 

Total  Exports 

16,168,575 

7.7 

639,158 

.3 

17,691,324 

8.4 

56,448,894 

26.9 

14,275,407     ]  6.8 

1897       

9,924,029W 
9,224,3640 
5,231,9030 

10.2 
5.1 
9.0 

1,108,884W 
154,0970 
745,6420 

1.1 

.1 

1.3 

12, 143, 204 W 
9,464,1630 
5,471,27.50 

12.4 
5.2 
9.4 

33, 840.. 506  W 
33,202,4960 
35,374,0610 

34.7 
18.3 
60.6 

5,202,416W 

25,129,6580 

2,402,7810 

5.3 

13.9 

■1 

4.1 

Total  Exports 

24,380,296 

7.2 

2,008,623 

.6 

27,078,642 

8.0 

102,417,063 

30.," 

32,734,8.55 

9.7 

1898   

9,132,771W    6.9 
19,252,8250  !  9.7 
6,798,8170  11.8 

3,356,818W 

2.5 

13,021,229W 
11,799,26.50 
8,720,9310 

9.9 
5.9 
15.1 

54, 600, 006 W 
.39,376,6150 
24,584,8860 

41.4 
19.8 
42.6 

5,706.466W 

4.3 

2,070,8330  j  1.0 
2,132,7820     3.7 

29.816,8890  115.0 

« 

5,923,4220  10.3 

Total  Exports 

35,184,413        9.0 

7,560,433     1  1.9 

33,541,425 

8.6 

118,561,507 

30.5 

41,446,777      10.7 

1899  

9,909,15aW 
13,276,3500 
3,991,1640 

9.7 
6.7 
8.2 

5,313,328W 
1,928,9560 
4,202,2990 

5.2 
1.0 

8. '7 

12,931,292W 
17,438,8130 
5,241,6770 

12.7 
8.8 
10.8 

32,071,942W 
40,151,7560 
14,591,0380 

31.5 
20.3 
30.1 

3,956,290Wi  3.9 

29,297,4190  14.8 

>• 

7,880,7660   16.3 

Total  Exports 

27,176,673 

7.8 

11,444,583 

3.3 

a5,611,782 

10.2 

86,814,735 

25.0 

41,134,475 

11.8 

1900 

10,596,361Wil3.3 
11,180,23.50  1  6.1 
5,026,4040   13.8 

4,677,96>Wi  5.8 
1,781,2660  1  1.0 
2,818,7350  1  7.8 

11,925,415W 
13,893,5250 
4,518,1680 

14.9 

7.5 

12.4 

21,934.963W 
43.645,9630 
9,505,4910 

27.4 
23.7 
26.2 

5,342,215W 
33,451,1700 

6.7 

18.2 

6,703,2460   18.4 

Total  Exports 

26,803,000 

8.9 

9,277,966     |  3.1 

30,337,108 

10.1 

75,086,417 

25.0 

45,496,631      15.1 

1901   

13,626, 071W 
4,068,6420 
2,667,1160 

9.2 
4.2 
8.9 

7,408, 140W 

593,0860 

2,732,0220 

5.0 

.6 

9.1 

20,084, 378W 
11,044,1970 
3,979,0840 

13.6 
11.3 
13.3 

30,161,250W 
23.162,8.500 
9,671,1590 

20.3 
23.8 
32.4 

ll,466,402w'  7.7 

15,645,1110  16.0 

<< 

2,824,1210  i  9.5 

Total  Exports 

20,381,829 

7.4 

10,733,248 

3.9 

35,107,659 

12.7 

62,995,259 

22.9 

29,935,634      10.9 

1902   

17,394,S86W  14.4 

256,3920  1  1.6 

2,397,5780  ,26.8 

9,233,016W    7.6 

77,0750       .5 

857,6370     9.6 

15,307,351W 
798,0970 
514,7410 

12.7 
4.9 
5.8 

27,1.36,272W 
3,124,4820 
3,871,.5960 

22.5 
19.3 
43.3 

10,434, 434W    8.6 

2,424,6170  115.0 

<• 

584,7560     6.5 

Total  Exports 

20,048,&56      13.7 

10,167,728        7.0 

16,620,189 

11.4 

34,132,350 

23.4 

13,443,807     i  9.2 

1903   

]6,055,004W  18.8 
6,884,7240  ,  7.8 

8,258,526W|  9.7 
1,631,6820  !  1.8 
1,621,3470  27.3 

6,738,533W 

7,063,8550 

185,5420 

7.9 
8.0 
3.1 

15,181,840W 

21,985,8160 

2,892,6120 

17.8 
24.8 
48.8 

3,451,763W    4.0 

9,990,9230 
0 

11.3 

«< 

1,138,2610 

19.2 

Total  Exports 

24,077,989 

13.4 

11,511,555     t  6.4 

13,987,980 

7.8 

40,060,268 

22.2 

13,442,686 

7.5 

1904   

7,.514,616W  35.1 
3,773,6950  '  8.5 
1,311,7020  33.3 

3,692,982W  17.2 
777,1840     1.8 
536,1260  13.6 

2,671,786W 

4,296,0950 

78,7220 

12.5 
9.7 
2.0 

1,750,628W 
10,018,8850 
1,875,2720 

8.2 
22.5 
47.6 

184,00OW 

6,164,9250 

52,5740 

9 

13  9 

•• 

1  3 

Total  Exports 

12,600,013     ,18.1 

1 

5,006,292        7.2 

7,046,603 

10.1 

13,644,785 

19.5 

6,401,499 

9.2 

IN  THE  MATTER  OF  DIFFERENTIAL  RATES 
TABLE  NO.  3 — ContinuedL 


309 


BALTIMORE. 

NEW  ORLEANS 

NORFOLK. 

NEWP'T  NEWS. 
(Known  as  York- 
town  previous^  to 
1889.) 

GALVESTON. 

TOTALS. 

13,141,293W  15.1 
7,122,3500   14.8 
1,380,2550  jl3.9 

13,530,944w!l5.5 
6,344,3750  |l3.2 
0 

105,672W 

510,3070 

.  0 

.1 

1.0 

2,079, (MOW 

2,560,0880 

80,2260 

2.4 

5.3 

.8 

1,310,950W 

98,5080 

0 

1.5 
.2 

87, 174, 003 W 
48,219,7290 
9.883,7790 

21,643,898      14.9 

19,875,319      13.7 

615,979 

.4 

4,719,354 

3.3 

1,409,458 

.9 

145,277,511 

8  543  ()85W  lf>  5 

2  901,531W    5  3 

w 

's'.i 

2, 365, 402 W 

4.3 

135, 137 W 

5,412C 

0 

.2 


55, 120, 989 W 

7,676,8(320 
460 

19.5 

5,341,5170 
0 

13.5 

1,228,9620 
0 

4,822,7380'  il2.2 
0    .... 

39,476,3720 
462.9390 

16,220,593 

17.1 

8,243,048 

8.7 

1,228,962 

1.3 

7,188,140 

7.5 

140,549 

.2 

95,060,300 

3,976,S38W 

9,645,7580' 

134,3180 

9.1 
16.3 

7  4 

762,878W 

8,756,7660' 

n 

1.7 
14.8 

163,265W 

3,716,0810 

0 

.4 
6.3 

1,185,400W 

4,866,3350 

104,9820 

2.7 
8.2 

5.8 

W 

'2!i 

43, 704, 128 W 

1,233,4770 
0 

59,248,3820 
1,808,5770 

13,756,914     il3.1 
6  588  559W  11.5 

9,519,644 

9.1 

3,879,346 

3.7 

6,156,717 

5.9 

1,233,477 

1.2 

104,761,087 

.q  S51  .'i.S7W 

6  7 

w 

10.6 

17,327W 
10,376,6250 
3,750,0540 

"s.6l 
11.9 

3,43S,939Wi  6.0 

57,297,711W 

25^602^6930  '21.1     25,301,5300 
6,919,5190  21.9 0 

20.8 

12,923,8200 
0 

6,207,7140 
0 

5.1 

121,363,7550 
31.540,0090 

39,110,771     ,18.6'    29,152,867     jl3.9 

12,923,820 

6.1 

14,144,006 

6.7 

9,614,653        4. el      210,201,475 

15,3O4,0S7W  15.7!    10,356, 248W 

43,048,0080  ,23.7|    27,714,4720 

5,270,0960     9.01      1,294,5180 

10.6 
15.3 
2.2 

987, 691 W 

12,427,3730 

0 

1.0 
6.9 

1,465,465W 
16,772,5390 
2,655,9000 

1.5 

9.3 
4.5 

7,355,636W    7.5        97,688, 116W 

4,073,0210     2.2       181,210,1910 

0   ....         58,446,1760 

63,622,141      I8.9!    39,365,238 

11.7 

13,415,064 

4.0 

20,898,904 

6.2 

11,428,657 

3.4 

337,344,483 

18,542,034W  14.0     12,795,542Wl  9.7 

45,096,4770  22. 6i    20,735,5690   10.4 

4,859,6860  i  8.4       1,662,9560     2.9 

600, 791 W 

9,383,3250 

0 

.5 
4.7 

2,937,312W 
16,115,3750 
3,038,7370 

2.2 
8.1 
5.2 

11,288,278W    8.6 

5,565,6000     2.8 

1,6680    .... 

131,981,247W 
199,212,7730 
57,723,8850 

68,498,197 

17.6;    35,194,067 

9.1 

9,984,116 

2.6 

22,091,424 

5.7 

16,855,546        4.3 

388,917,905 

9,549,270W 

46,786,1270 

4,005,1070 

9.4     11,562,812W 
23.6     21,939,5860 
8.3!          923,7290 

11.4 

11.1 

1.9 

148,882W 

5,829,6420 

2800 

.2 
2.9 

503, 897 W 
14,170,1310 
7,558,0040 

.5'    15,713, 400W 
7.2'      7,049,6970 
15.6J           68,8140 

15.5 

3.6 

.1 

101,66O,272W 
197,868,4760 
48,452,8780 

60,340,504 

17.3:    34,426,127        9.9 

5,978,804 

1.7 

22,232,0S2 

6.4!    22,821,911 

6.6 

347,981,626 

4, 529, 811 W 

40,535,0230 

3,972,8100 

5.7       8,059,677W 
22.0     23,403,4530 
10.9j      1,569,1920 

10.1                   199W 
12.7       4,445,0890 
4.3              3,3590 

'2.4 
.1 

1,675, 294 W 
8,702,3130 
2,227,3180 

2.1     11,188,056W 
4.7       3,073,5250 
6.1                   550 

14.0 
1.7 

79,929,956W 
184,111,5620 
36,344,7780 

49,037,644 

16.3     33,032,322 

11.0 

4,448,647 

1.5 

12,604,925 

4.2     14,261,636 



4.8 

300,386,296 

19,962,737W 
24,711,7900 

13.51    24,410,979W 
25.31    12,832,1390 
12.2       1,510,2510 

16.5i         660,590W 
13.2       2,214,6840 
o.lj                 7480 

.4 
2.3 

4,785, 596W 
3,172,5730 
2,824,5660 

3.2 
3.3 

(*  5 

15,714,465W 

C 

0 

10.6 

148,280,608W 
97,465,0720 
29,861,8770 

48,327,337 

17.5 

38,753,369 

14.1 

2,876,022 

1.0 

10,782,735 

3.9 

15,714,465 

5.7 

275,607,557 

9,46O,012W 

4,501,5550 

137,5050 

7.8 

27.8 

1.5 

15,643,745W 

2,454,1280 

357,2680 

12.9 

15.2 

4.0 

128,00OW 

386,8400 

0 

2!4 

5,021, 667W 

1,184,8160 

223,8370 

4.2 
7.3 
2.5 

11,081,326W 

963,2050 

0 

9.2 
6.0 

12O,840,709W 
16,171,2070 
8,944,9180 

14,099,072 

9.7 

18,455,141 

12.6 

514,840 

6,430,320 

4.4 

12,014,531        8.2       145,956,834 

3,373,689W 

19,113,5660 

56,9510 

4.0 
21.6 

11,989,273W 
13,332,2080 

14. ol           26,319W 

15.01         840,3970 

.6' 0 

334,448W 

3,535,9660 

0 

.4 

4.0 

20,089,633W 

4,274,0910 

5000 

23. 4;        85,449,028W 
4.8|        88,653,2230 
....!          5,931,1480 

! 

22,544,206 

12.5     25,357,411      14.1 

866,716 

.5 

3,870,414 

2.1 

24,314,224 

13.5       180,033,399 

140,262W 

7,706,2370 

22,5600 

e'     1  «oi  fifiixiyi  R  « 

W 

W 

sA 

3,582, 104Wil6.7         21,427,442W 

17.4 
.6 

6!233!4170  14.0 
61,5550     1.6 

579,7950 
0 

1.3 

1,394,5440 
0 

3,483,1760 
40O 

7.81        44,427,9530 
....           3,938,5510 

7,869,059 

11.3 

8,186,066     In. 7 

579,795          .8 

1,394,544 

2.0 

7,065,320 

10.1 

69,793,946 

310  ATLANTIC    PORT    DIFFERENTIALS 

Table  No.  4  gives  the  exports  of  flour  through  Boston,  New  York, 
Phihidelphia  and  Baltimore,  with  percentages  in  each  case  to  the 
group,  from  1878  to  1904,  inclusive. 


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rt<O;r-l«-^COO>«C'Q0T—  CO<MOtOcO-*CO«C><Mi— 'ttOCMl^QOCC 

Tti  TjH  Tj(  rfl  TjH  -^  0_«5_0^-*__CO  ^_^l--^50^CO_^Oi_lfJ_0  co_^oq^co__o^co_^~  Tj<  (>J_ 

i-H  r-T  CO  (M^oTc^Toi^CO  fo'<M'~Cg~Co'o<rCsrco'co'co'^Co"co''-r 


Ci  c;  Lo  -^  Lo  CO  t^  lo  1— (  c.  o  1 


I00i'-<5CIOOOC1CO'-Il>-Q0!0 


>OCOCOtEi'-li:MCOt^MCOCiOO(Mt~-<tlt^(MCC>TH^lOt--t~T— it^T-H 
Cvli-(?Ci^HC;'-<i<CO00«5OiC0t^O0-*TtHC0?C>(M<M00(MC0CO(MO>t-lO 
OO<MC0IO(Mi— lO-rtHcOUOOOttiTfl^^t— ii-HTjH-^lC'IOl^i— 'i-H 


,-^t^  00 


O'^OICO'-HtnCOCOO-*'— ('K>CO»l-^CO'*LO'*<rH-^l^r-'-tlCO 

lO  t^  C3  ?D  (M  05  00  O  t-  lO  CD  lO  rfl  t~  t^  C'  lO  T-H  ^  C  t~  CO'  01  to  lO 

Ol^Hf-iCOCO^COtOCOlCODrH^OC^COC^O".   COQOCDi-ii-HOJlOtDOn 

1— I  rH  T— !  r-n'  i-Tc^l  C^fo-f  CI  C-ri-T 


■"^HCOOlt^tMl^OC-lTOtDlOIOtOOICOOClrHdCSi-ICOQOt^OMCl 


ODt^?C>«5?OC005i— lOCOIOceOOt— itoirri.Ot^rfiL'Oiffli— iCi-t<CC 
'  »C  CO  CC'  OJ  -l^  r-^  CI  ^  I— I  t-  'X5  Cj  ^  ^  CO  O'  Tti  CO  :0  >—  CO  C'  ^H  CI  CC  '-C 
^CJ_CI_^03  lO^i-H  O__O^C0_^O  d  IC  IC  CO_^CT^Ci  '-[^'-^  ■*  t-  Cl_^O^C0^t-^  ■-<_^C:__t~^ 
r  t^' C r  Lo"  cT  o"  o"  Co"  <»"  t-h' O^  o' Co'~  Go"^ ^"^  !>•"  cf  ^' t~-' oT  00°"  •<*<"  t^-"^ cf  cT  T-T  of 

locoo;  iccoo^cocod^^ascico-^oi'— <>— lOicodoooi-^GCi^ 

^00_Ol^«5  ?0  C0_^Ci^t-^-*_rt<_^00_^t--_^>-H^O_O'  Cl^LO  0D_^O  l--^l>-^-*^0^  i-*^0J_«O^ 
r  CO*"  Co"  Co"  Co"  ■*'  Co"  Co'  Co'  ■*'"  Co"  Co'  Co"  ■*"  ^  O  5D~  ■>*"  ■*"  ■^''  ■*"  TtT  TtH~  ■*''  ■^jT  TfT  cT 


tMi-II:^C7iO5«Cai-*-*Clt^;CCl-*C0l:^O-C0<»-*l^i— ico-<*<-^ccio 


1— It^OOOClClCOCli— lCOi-lt^COOi-H(Mt--?OiHt-t-lOOOlO'<*<CO 
rHT-li— ICOt^'*C-lCOCl-*ilOail^dt^(MlOdCOQOlOt>-^CI-fO 
.'~L'~l'^'  C0_^i-H^Q0^C0__t--_C0^C0^00^Cl^®^l-~_^-*_^rtH_^'-^^lO^l--^O_C]^i-H^'--<_C0  ~^'— ^ 
"oo''oc'QC~ffl'tCrco'"orco'"cz''cj'"o.rcro"crio'"co"co'~l^'~OC  Croo'"cD''j;'r-'  l^'c" 
>—  '^^OCDQCaiOOlOOidOOtDCilOOCOlOOl^dCC-.  C;-.£'— 
0  OC  00  d  l--^i-H^t-_0  O  ■*  d  d  110^ O^ 00  r-1  ■*_^'<*<  O  IC^IC^CD  -rp^CT.  I~  O 
r^r^cTr-ici'oS'r-i'r^r-i'T-Toi'r^oSr-i'r^r-^T-^r^T-ir^ 


OOOlOi— l(MC0'*<l0?0t^00C3Or-'df0'*l0«t--QCdO^i£MC0-+ 
t^t^OOCOOCCOOOGOCOCC'OC'GOOlClCiajCTSOlC".  OIOIOSCCCSO 
OOOOOOOOOOOOQCOOODOC'lXOCGCQOQOODCC'QCGC'COOOOOaiOlClC-.  Cj 


311 


312  ATLANTIC   PORT   DIFFERENTIALS 

Table  No.  5  gives  the  exports  of  provisions  through  Boston,  New 
York,  Philadelphia  and  Baltimore,  from  1878  to  1904,  inclusive,  with 
percentages  in  each  case  to  the  group. 


I 


_ij 

u 

P^ 

6 

o 

£ 

CO 

it: 

pq 

5 

o 

fU 

_^ 

o 

PH 

CS 

^ 

Oh 

(V 

rs 

rt 

173 

PL| 

O 

(k 

_^ 

o 

(^ 

^ 



O 

r^ 

^ 

CO 

QJ 

1=1 

;^, 

O 

P^ 

PM 


oc  cc 
oocr' 

oo  t^ 


(M  O  O  O  OS 

■*  QC   02 

o  to  -^ 


cc  GO 


Oi  lO  o 

t^   «?   r-t 
"*  fO  CO 

o  QC  cj; 


^  OS  I 

(--'cc 

00  CI 

Oi  io_^ 
o  o 


CM  O 
OS  t^  ' 

o  o 


l_'t^05_ 

'cs'c' 
(O  o 

O  «3 


lOaOi-H«DlOOC<l-*eoOSlOrH'^lO 
0100t^tC>Tt<T»HO<lQCTtllO'tlC-10M 
lOiO'^-^OSI^QOOSlO'^G;  C-li— lTt< 

■^   1-^  I— I   1-H   OS  CO  O    t^  ■<*•   1-1    IQ   ^    rf  oo 

__ ?q^ ;o_  co^  t -^  o^  i^_^  ci_  m'^^ o^  t-_^ tc  co^ ic^ i-i 

"  TtT  rn"  •*' i-T  ciT  I  ^^  os' I  o"  ic"  t-"  I--' c^r  c^r  ■*" 

CMt^COOOCO-^COCMOCOC^JC^lT-l 
l--^!C>  '*_'0  lO  lO  l--_^'-H^r-<  O  Oi  l^  •*  i£) 
"  r-T  r-T  r-T  r-T  i-T  i-T  i-T  cT  CsT  cm"  r-i'  r-T  i-T  r-T 


OSCOOO;OQOmoO«C>t^CqCqOCOr-<OSi-IOSt^i»«5t~t-TtHi-lrHOS«5 
C<ICCCC-*  i-H  C<JCO>OlOlnOSOOSCOOiOO^Tt<CMCCOCCL-OS 


COCJf— IOCCO-*CO-*^Tt<0-'*CO'— ICMi— lO"— 1>0' 
CO  CI  OS  00  C-I  Ttl  !— I  lO  »  t^  O  CO  CO  ■*  t^  l>-  t^  oi  cc  ' 
C0-*00-*CM1— It^OSlO--*"— ll^C~1005-^OCOOi 


CM  c:  O^J 
t^  IC  lO 

r-l  CO  Tt< 


io-*?ot^OTti';c>oocc<ffloo«ot~kOTtiiocoT-< 

'-HCSCvllOOOOSOTtlQO'-iCMOSl--'-tlOOOSrHCMt^ 
<©  CD  lO  t^  l^  i-(  t~.  I— I  OS  eg  TjH  l^  Tt<  <0  CM  IC  I— I  OS  lO 


CI  t- 

C^J  CO 


i-H  ira  o 

OS  lO  CO 
_-*_^«3^00_^ 
CS  o:  O  ' 
CD  CO  O  I 
CI  CM  CJ 


1—1  OS  CI 
OS  lO  -^ 
lO  CO  rfi 


lOOSCOCMt-OOSCOCOOCOt^-^CDOlrJHlOCOrHCOOSOOlOr-lrtHOOOS 
OSOOt>-CDQCQOt^COOSCDin'lO"^'^COlC'^CO-*'^COlOt>t~Ot^CD 


OlOt^l^OCDOSi-H-^lOCMO-^IOSCOOOrHOOOCMOlOlOCOOSlOr-l  lO 

ODOOCOOSOOOlOCMOSCOOCOt-'— lOSi— lOOSOi-HOSi-toOt^lSt^-^  CO 

"^^o^^co^o  OS  o  f-H^t^  '^■L'"'  t^  CD  CM  cq^-*  OS  ^  ^^^  ®^**„<*  CO  ■*  t^  '■■"■^o^  ^ 

CM  CO  ^H  lo'i-^-'oTi— I  io"os  go"  r-T  lo"  r-T  CO  o'co'co'co  co' O  CO  lo"  OS~  I--' I— I  CO  cT  I-T 

CM  O  rt<  CO  Tf  00  OS  -*  ■^  CO  OS  OS  t^  t^  C'  O  CO  -^  C^l  CJ  QO  lO  CO  CO  l^  LO  CO  l-O 

OS^Ol  'JIOlO'-HlO-^l^i— lOOCOl^  OS__0D_Cq_Ol  "*  'O  ^^t^^t-^^  1^  o  co_^t-  o 

>-ri-rco"os"c'i-~'cc'~io"co'"co~co"'**~c,f  qo'"ijo"i>-"cd''co'co"co  CO  fo'"o'c'"or'-H~o'  o' 

CMCOT-^CSOSCOl^COOSCOlOCOl^t-COt-COIOCOt^OOC]lC-<*l^i— Ir^  •— I 
I— II— ll— t                                                                                                                                                               I— ll-Hl— II—II— ll— (UO 


QOCOODCOr-lini^lCt^OQOOOT-ICOi— lOSOOlOt^rHin'— IC'li— It^OS 


CO  OS 
lO  l- 

l>-_^OS^ 

co^o" 

>-(  O 


CO  CO  CM 
^  GO  C] 
CO  CO  lO 


IOGOt— It-.lO'-ICOCOt^CMCMCOOTtHOSOSCOOSOlOOSOS 
>— IOOOCOTt<'-HOCMCQCOOSLOOSt^t^t^»0'— ICOOr-i-* 
^10'*lOCOCOOOOCMOOCOCOC.10':t<rHOD  OS_  CO_^  C-)^  CO_^  lO^ 
t^'"co'"Tf'"cT"lo"'co''co''ori>-'~Co''c^rorGo'~lo'~C4  O  CO  i— I  lO  O  i— I  tJH 

^c-ii^-^oosocoocO'-Hi^osos'ni'-H'— ii-H"— I'ocoos 
oa  ini  lo  OS  o  CI  o  OS  lo  t~  OS  i^  o  OS  lo  1— I  Tti  I— I  o  CO  CO  ^ 


O  lO  ■*  ' 
lO  CO  CO  ( 

1— I    T— I    t^    I 


COCOlOi— 'lO'COlO-— lOSCOCOClt^^lOCOOSrHCM 
t^COlOI^'OCOl^TtiCOCMOOCCOSOS'— ICOOSOSOSQO 
t^  l^  t^  L^  t^  O  O  O  00  OS  oo  00  OS  O  t-H  O  O  OS  GO  OS 


OOt^r-HCD-^iOCOCOCOOOt^COCOCMCD-^lr^OSOO-^OOOCDTjiCDCD 


COCOOlOt—lOOSCOt^CClT— (t^i— (COOOOrJ<TtlCO'-l'*OOOOCMOOCO 
T— iTjI^HCOlOi— ICOt^OSCOCOOCMOCOOSCOTt<l^COOCOCOOOOSCOOS 
OSCDi— ICCOSOCOCCCOt^l^QOOSlOi— (00Cl'-<r^Ol  CO^'-*^^  0_^CO_^O^CO__TtH_^ 

Co"t-~''c£r-*ri^"lo"co'~Oo'"t-'"'-rco''co'"orco'"t-~"Ttro'~l--'"lo'co'-^  '^  OS  rt<  I— I  CM  OS 
^^l^Tt<COC^lCOQOrH-^OlOl^'— I"— iCMOCCCICOCOt^OOO-t^CO'TtHCO 
CO  OS  I— I  m  OS  CM  O  cc  00  CM  OS  »C  •*  lO  oo  CM  cc  CO  CO  O  OS^CO^  C0_^  CO_  CO_^  rH_  r)H^ 

t~-"cM"-^"oo"rH"lo''-<^"co'~o"co"oro'"c^ro'~'*'cc'lo''rM'co'cro't^  C^l  go' CO  t>.  iO 
1^  t^  lO  t^  oo  CM  lO  t^  t^  >— I  CO  »0  t-  O  CS  t~  lO  O  C^l  00  ■*  >-<  C-l  Tt<  O  O  CO 
T-li— ICMCMi— li— lT-(r-lr-ICMi— ICMCO-*COCOCO-*-*-*CCCOlOtOTtlCOCO 


GOOSOi— ICMCO'*t>OCOt^OOc3sC>rHCMCO-*lOCOt^OOOsOrHO.]CO-<tl<! 
t^t^COCOQOQOCOOOOOoOOOaDOSOSOSOSCSOSOSOlOSOSCrCOOO 
OOOOQOOOCCOOOOCCCOooOOooQOCOaCOOOOOOOOCOCCOOOSOSOSOSOS 
I— li-(r- li-li—li— li-(i— lr-<_(r-l_ii— ll— ll— li— (rHi-1i— (i-lr-li— li—lr-li— ti— ll— I 

313 


btd, 


314 


ATLANTIC    PORT   DIFFERENTIALS 


Table  No.  6  gives  the  total  value  of  all  exports  through  these  four 
ports  from  1878  to  1904,  inclusive,  with  percentages  in  each  case  to  the 
entire  group. 


il 


^  =^  K°  I  -  i 

O    O  tH  J-'    fc,  ' 


0;  a 


W 


Ph 


0  1.0  1— (wrooatMi— icoGccoast~iMfooco"*OTt<iot^T)<t~t-t~oo 


00  -^  ■ 

CO  00  1 

o;  1.0 


fO  c  o 

O  lO  OC' 
CO  CO  o 


OC-1O-«tll0i3iC0<M<M0ClC0l0l0(MC0l0t^C0'-HlO00>O 
CO«5r-l.— IC^JClOi-*-— lrH<M?Dl^OCO-*iCOTtlOO<Mt~l:^ 

^_^M  o_oo__io^ac^c;  ^^Si  "-H^oi  to^ci^o^^^  ^^'~*  i~  cc  o  t^  (m 
0150'— loo^tc'oo  o~oo'cf  Lo'-^'co'i^' io"o~oo'~oo*"t--'"i--'"c'r 

?C  l^   GC  00  00  >— I  O  CO  (M  O  Gi  LT  rf  05  Ol  (M  lO  t^  O  C:  ^  CO 
^OOt^^lOOii— lQOCOGCTt<;Ot-t^l^LOCOlOC<ltOCOaO 


CO  c 

O  GC' 


05  CI  .-I 
O  OO  l~ 
lO  lO  ■* 


OCDl^C^lOCOLTtMi-H-^-^OCV  ^1— lOJ^-— i-^-^COCO 
lO-+-^T}<TjH-*Tj(lOlOtO>niOTj<lOl»t^l^OCQOt^L^t- 


00 

o 

^ 

■^ 

-* 

O   CO   1<   TjH 

TfH  t~  O  (M 

!0  <M 

I— 1 

O  rJH 

CJ 

03 

CO' 

-*  C-l  CO  Ol 

rn 

(N 

cr. 

C] 

CO 

CJ 

00 

^ 

c; 

Oi 

00 

^ 

o 

^H 

'^  OJ  lO  CO  TlH  M  Ol  CO 

^ 

-+ 

't  Ol 

o 

rt 

^ 

I— 1 

1—1 

I— { 

I—I 

r-H 

r-{  I— 1 

1— ( 

I— 1  1—1 

"" 

" 

" 

I— 1 

rH  «5  M 
O  Oi  05 
(M  l^  CO 


t^lOOCOCqOt^-^OlOOCOCDIMOiOCvlCOODCOOaM 

IMOit^'— ^■^^O'-^C00aT— ICOOlOt^OllOODT-lt^i— ll~ 
lO_i:J<^(»_-*_!C_0_^Cvl__tC_ao  i-<__0__(3i  00  -^  00  "»^C1  Ol  Cl  0"^'-H 

CI  ^"o  ■*  cPto"'*'  ^H  '*~i-rcrcr-*'''-o~cjrcro"'*"co'"crcrorc"r-i 

o;  t^cviT^i— iLQiffl-^-rtHOi— ioi»L0  05cc->:tic;«3i^c/:c;i^^ 

"*^^^'^is'*^^^^^'^^'~L'^  ^  '^^®  Gi  CO  t^  "^.^  00  CO  ?0  l^  O  ^  i-i 

Lo  i~-'"«roq  cT  ■*'"co"io'ko~'-rco~o'"co'-'4H'"oD'"'-*"oo'"i-r«rLo'"Qo'"t--rL'T"«o 
■rtiiot^t-coiOTii-<*<co>ni'^iot^<©ajt^t^50«5cc'-'Oi-^c 

■(H-  r-1  1— I  r-l   1— I 


ire  o  CD 
t^  t^  t^ 

C_^CO_^00^ 

co''i--'o 
C:  IT  CI 

lO  5C  CC 

cT'— of 

00  OC  CO 


CO 

00 

C^ 

CO 

o 

CO  OS 

o 

Oi  00 

t^ 

r^ 

T-t 

ire 

O  i-l 

C^l 

o 

05 

l^ 

l^  d  CO  •* 

oc 

o 

t^ 

cr. 

C5 

00 

t- 

00 

t- 

t^ 

00 

t^ 

t-  CO 

CO 

t^ 

CO  0>  Oi 

t^ 

1^ 

1^ 

l^ 

t^  oc 

Ci 

Oi 

o 

o 

C-. 

" 

II— icDiret^ooicot^cocooi-^oicoireococo^ 
iUj^i^TTOji— (cot^i— icoc\icoc.i-*'iocjire^c:ojocooioco 
i^iM^co  r-it-ireccoo-*T}ioocooiTt<coi^cr:cocooi-*ireco-*'* 

( t>.  t-j'cq^i--  crar^co"i>-'oroc'c'^-*'^crG«3~c£rco'i^'"of  Lre'cvTi-Ti-ri-^r 

(■'*ireC0CO"*i— iC0C0OC0C0C0l^00OC003CC'*ClrHireGrC0 
^i-J^OS^r^^-^^^CO^t^  co_^t>-_^t^  '-H,'*  '^  '^^'^^^  '*„''i'~  '^^'^  'H.^'^  "^^ 
r^  i>.'~o<rco'^oo'"co"ire'~oD''i>ri>reo"ao'o;  <::> -^ a^ v>  (a  c>  cc  a^ cT cc  r-^ 
(i*cocococococoiMcqcocoire"*-<*cocoTj<irecot^t^oci^t^ 


COCai^CO»reCJCOQOOJOOOOC503'*COOCDC]CJCLTU':i— iccoc 


New  York. 

Qcoiciooco^cot^i— iire-^i— iiret^oi^cocociiret-irecoireLooiOi 

t^i— toococo^ci"— it^ocirecot^t^coooi— imi^cocit-coQC-^o 

•<*_aC_CO__CJ^i-i^C0__C)^C]^CO_^C0__t>-_^i-l^t>-__0<]^t~  COOSOO'^OiCOLre'^  "R,^  ■*  '■'"^ 

CO  cr  "^  cxTovi  oc  ciT 00  co'cfccToo^oc" cD~ire~ cTcfco'^ic'o' ciTr-Tc' oTco'^' lo^ 

C 1  0-.   —   IT  O  O  ^  1-1  03  ■*  OO  Ca  CO  O  CO  -*  <3i  O  ire  ■— 1  Cl  C   CO  C 1  Oi  t^  o 
Cl_l-^lO__tO^^^CO_^O^t--_'*^QO__-*_^03^Ca_a)^C'^0__i-<_^0-.  CO_^CC'  TJH  C»  OJ  ^.^'"'^oc,'^., 

i^  i-'l-  co' c  r  i~-' o" '^^  TfT  co""  i-T  o' o' i>r -f"  of  err  !>■"-*"  oa't-'cTt^'co"  oT  of  CO*" 
CQciccoico-^oacooooi— (THcoocoirei— i-^ooco-^Oi— (t^oios 
cocococococococococococococO'<!*<cocococoeO'^i*ireire-<*i-<ti'^ 

t,  -1^ 

oooq'*i-i03ireooireoooooireo-*iooooTtic<iooji-^oit^Oj'-i 

^6 

ooocicocMcoocicnc<jirecoirecoire-"tit~i.-^cocococococoi-ic<i 

o 

03 

o 

■^Oit^cocoi-iocococOTtHOiiret^cot^coooooiret-oooicoLococo 
Tt  I— 1  00  o;  ci  c  c  CO  rH  ire  CO  o  ire  i-H  ci  Lre  -+  I— 1  t^  o  CI  I— 1  CO  cc  i~  ire  c 
o_o  Lre^i— ^^ire^i-i^cr^^cc^ire^^i— '  co  -*_  <^^^  ure  r^  co  o  i-^  co  ci  ^  c  oo  ■— >  ire  ci 
of  o" co" o  -^^ co'  Gc' go" go" ire'  co" go" •*" <~  ^ ire" ■-<" ire" gc" i-T cT oT cf  ire" of  -rf  oc" 
'+OC1O1— ii^cii^cit^octocoi-ii-HOiTjicocoirecioiirecrirecoco 

ire_^i-t_^O^i-1^CO_^Cl_ire_^CO__rtH__b-_Tll_^OO^CO_^t-_CD_^ire  as  0  co  rJi^rH^ire  C  Ci  t~-,"*,'=>„ 

co"  00'  go'  d  I-T  I-l  ci"  ^  co"  t-"  ire"  00"  0"  co"  co"  -rti'  cf  ire"  ■^"  a^  co"  ire"  0"  c  f  ^'  t-"  cT 

Tfi'^irei^COCDCOCOlOireiOCCt^t^OCOCODOOOlO:'— iCIi-^'^CGCGC 

«■                                                                                                                                           1-1  I-l  rH  I—  1-1 

' 

TO 

r^ 

00050i-IC]CO"*ireCOt^OOO>C'i— IClCO'*ireCOt^CCO:CrHCJCO^ 
t^t-OOOOODGCOOOOQOGCOOOOOjOJOiO-.OiOJOlOiOiOiOOOOC' 
OOOOOOODCOOOOOOOODOOOOGCOOGCGCGCOC'GOOOOOOCOC01030105C5 

315 


316 


ATLANTIC    PORT    DIFFERENTIALS 


Table  No.  7  gives  the  total  value  of  all  imports  through  these  four 
ports,  from  1878  to  190-1,  inclusive,  with  percentages  in  each  case  to  the 
group  and  in  case  of  New  York  to  the  total  imports  of  the  United 
States. 


4 


<^^-. 


pq 


t^CJOSOOOtOt^OOOOOTtl-^t^OOCOlOCOi— lOOCOQOOJi— loeoco 


I  U5  «D 

I  00  CO 


<M(MC0OC0«0t^00lOOIO00(M-*0iC0(M(M00«0-^ 

o  co_oq^(>j^oi^C5  oq^r-H^Oi  coi— (0'-hoo(M(mio'-h050o<o 

ccTiN  (>rLo  Qc  ^D~3rc^rco'~orT-H'(M'^o"ira'~ro^'--r-^'~io"t^'~Ttr-r)r 

^05C'.IOC0C0l^G0-^aDt-(0if0  0]00ir0'*lO(M'— ito 
O^Cvl^O^OO^CO^^O^CO^OS^t^  rH_0O__^^-*  OJ^O^O  CO  CO  ^  CO  o 

!0  lo  ^  o  t~  oj~o  QC  i-To  i-Tltj  o'o'^"*  co^o^Lo'cTof  lO^ 

l^  1--  O]  t^  OO  O  TjH  00  CO  i-H  CO  C'  CO  CC  (35  'O  CC  lO  O  Ol  lO 
lO-*lO>niO«3COa50t^lOC£>C£>CO'*ilC>CO?CL^t^t^ 


OvlTtH(MO«OlOOOCOOOi— li— lTt<OC0C0r-liHO«0-*CvlC0C0»0CDi-H 
lOCOCOCOlOir5lO«3t~t-t~OOOOOOQOO>OOOt~t^COt^t^l~COt^t^ 


to  -H 

co^t-*" 

CO  t^ 

CO  CO 


O  '-0  as  to  '-0  C35  CO  05  I— I  O]  LO  O  ^H  t^  CO  to  >»  Og  l^  CO  01  CO  (M  -H  ?0 

oot-LO'— !'-'.-('*<  oqot-foioi-^itDt—  CO  1^  a;  iMO'+-*coo 

lO'-^'OlOCvlOCOCO'— ItOCOCOl^t— lOitOCOtOailOO-^CO-^T-H 


'THCOtOCOt^Ol'— lOaCOOOtOt^tOCvltOMOCMCn 
■*  CO  CO  CO  LO  i-H  to  lO  t~  (M  CO  'M  O  O]  eg  O  -rtl  t^  --I 

oiirat-Jt^toosLooit^Lraoi^Or-it^coooO'* 


C-.1  to  CO 
(M  to  Tf< 
(M  CO  O 


C'  lO  o 
lO  0>  <31 
l-~  Oi  CO 


COcOt~t~tOTj<C»OI>-'-IOC005i— lt^<MO]OilOCO^OO'#05010 


Oi  CO  CO 
lO  LO  LO 
LO  O  --^ 


'tirHCOOCO'M'— l-+t^COt^(MCO^HOO(MOOO(MtO 
OOJl^CO^COCOl^COiO^OlCllMCiCOLOlOaDO 
Oi  00   Cvl  to  t^  as  to  l^  LO  to  C'  >— I  LO  Ci  >— I  l^  LO   O  to  OJ  05 


Oi  (M  CO 
Tji    to   CO 

00  to  o 


l^  Oi  L^ 
Oj  ^  CO 
l-;^CO_^ai^ 

05  O  lO 
Cvl  CO  "* 


OOlOOit^OOOOtOCOtOtOOOCOLO'— ICMCOrHOit^Ci 
lOtOOi— ll^COOSCgiOO-lCOCOLOOi^COOCOLOCOLO 

'iH^o^o^'-H_o^co_^tD_^^_^'— I  Tfi^i-^-^io^^in^t^  "-""v^  ^^'-^  LO  o]  00 
Lo""  co' to^  L-^  o"  oT  to""  cT  oT  to' i>^  to"  (xT  Lo'~  t^-""  oT  o^  o  r  1  o"  t-T  tJ" 

CO  Oi  CR  to  GO  --H  lO  l^  l^  T— I  CO  CO  "^l  ^H  l^  Ci  CJ  C  to  CO  OJ 
^-*^THCO^'*''*-*LOLOLOLO-*'*^-#-H-tllOLO 


O  L^  r- ( 
CO  O  l^ 
Oi  L^  .-H 


Ci  to 

l^  CO  '^  t^  "*  (M  T-H  L^  05  r-i   L^  CO  L5  CI   Ltl  O  ■*  CO  -*  0 1  to  't'  CO  Oi  t^ 

o  o 
1—1  I— 1 

^,-(>-li— IrHrHi-HOOi— l0500i-IOi'-H(M-*Oa30C1000 
i-Hi— li— li-(i-Hi— li— It— li— It— 1           t—li— IrH           i— li— li— li— 1           i— 1           i— (t-Ii— 1 

CO  ^ 
Ol  05 
O  I- 

tOCOt^L0^05t^OOOCOtO'+la5-*'-HGO-HOi'*0050tDtOI^ 
COOLOt-LOO'JOCOl^C^ltO'-^CCL:)CO^tO^^C5itOCOl■-COaDa5 
rHi-IOOIOOil'-COl^OtOtO-*tOCOi— ICO-*Oa-.  OlCO-^LOtO 

00  GO 
to  -tl 

01  -ry 


COO-#01iraLOOOOl^i-Ht0  03  0l^050i0500L7t^LOOa 

otoc:iLoto^co^Ha>coi--^^GOLTiooDi^i^t~CTjaiLo 

LO  OJ  lO  LO  00  "*  Tfl  O  GO  t^  GO  Ol  r^  CO  CO   00  ^^  i-^  -fl  O'  i-^  ^ 


O  1.' 

CM   rH    LO 

(3i  CO  to 


tOt-'#0-^'*OmOJ030lOOOOcOO<IOi-(OOCOtDaC01CO»Ol:^ 
-*C0C0C0Sg0JNCq0CI(MOa(M0qcOOJ(M0CI0qWi-liHrH0aO5C0C0<M 


iO-t<OitOOOCiLOtO-tiOLO^COt—  C0t0Ot0OC000L701C0'-Hl^00 
LO   O  GO  ^  LO  l^  to  Oi  -H  OI  00  -*  O  00  03  Tt*  O  O  CO   Oi  '-'  LO  l^  l^  00  to  t« 

c»_to  OS  00  CM  i-<__to_^to_^ai^as_^io__Go_^oj_to__io_^oi^oi^t--^tc__^_^r-H^rH^og_'*^oi^r- i-_ 
"Lo^aTcc^oTco  oTto  lo'i— i  ^■5  o^lo^co  o'qo  cT to" th^L'-'i—Tlo  ci  10  co'lo 

-rtlG0C0O;Ol-t<31C0^OJ^lOi— ILOt^tOL^l^OLO'^OiOJC;''* 
31  1— I  CJ  LO  -*  GO'  to  LO  l^  Ol  1— )  LO  't  — t  OJ  01  ^  CO  Ci  ^H  O  CO  00  00  CO 


CO  o 

to"^' 


(31  to  -t< 


01 


C0C31O'— lOacO-^IOtOt-COOlOi— l05CO->;t<lOtOl^C0010rH0.1CO-*l 
l~L-COaOOOOOOOOOOOCOOOOO<3S0501050101050l05050C:000 

OOOOO0a0O0COCX)O0O0O00OGCO0O0OOCOO0ODO0O0CO0Oc3'.  (3:   cr.   31(31 


318  ATLANTIC    PORT    DIFFERENTIALS 

[53]  The  rate  disturbances  out  of  which  this  investigation  grew  were 
occasioned  primarily  by  a  dispute  over  the  differential  on  ex-lake  grain. 
While  that  subject  was  before  the  Commission  in  1897  and  incidentally 
referred  to  in  its  report  in  that  case  it  was  not  examined  in  detail. 
The  facts  in  reference  to  this  traffic  are  as  follows : 

Grain  is  carried  by  rail  from  various  points  of  origin  to  different 
western  ports  upon  the  Great  Lakes  like  Chicago,  Milwaukee  and  Du- 
luth,  from  whence  it  is  transported  by  vessel  to  various  eastern  lake 
ports  of  which  the  principal  one  is  Buffalo.  Tariffs  are  so  arranged 
that  grain  moves  from  nearly  all  points  in  Kansas  and  territory  north 
via  the  Great  Lakes. 

Flour  also  takes  to  a  very  considerable  extent  the  same  route.  IMills 
at  interior  points  like  Minneapolis  ship  to  the  lake  and  from  thence  by 
water  and  rail  to  the  seaboard.  Since  the  cost  of  transportation  during 
the  season  of  navigation  is  less  by  this  route  than  by  the  all-rail  route, 
large  quantities  of  traffic  seek  this  avenue.  The  following  table  No.  8 
gives  the  receipts  of  flour  and  grain  at  Buffalo  from  1873  down  to  and 
including  1904,  as  reported  by  the  Buffalo  Chamber  of  Commerce. 


c« 

m 

o 

-q 

'rt 

o 

m 

H 

00 

<x> 

OJ 

tc 

m 

w 

m 

OJ 

>>-5     1 

M 

1 

OOOQCTHC<I0:i(Mt-OOOOOOOOOOOOl.0  10-*rC0i0".  CO'+'CCOO 

Oi— i^oiooi— iooro<x3_^o^a3  ^^op  ai'o_oocioooa5__'-HTt<ce«orH(M(rO'— tooco 
'-H"c^r'*"cc  •ri^'to'aJ  co'C'  CO  CI  ro  (M  -H  o'co  oTc^fro  aToi  aToo''— <  o'~i-''c^rTt<  o~oo~>o"co" 

OO  t^  03  CO  CO  OC'  :0  l-T   ~   re   Cl  --C  ^  ^  Cl  Cl  CO  i-i  O-.  CO  ^  >0  Oi  fO  O'  CC  Oi  Ol  --h  >— l  C5i  O". 
<>J^-#_i— (  0__?0  '-H^?-_-+  ^^, '^    '~,~v^,'"  '~  '^L*v"  *^^  '^V^^'*  -f  -f  lO  ^  O  CI  'O^O  to 

t--'~c\rio~^'ro'  oT-*'  -f<"i-'  cT  lo  -J  oj'oi'  -t'ro'cToracrco  >o  coccai  as'  lo'io^o'oi'co'cc'o 
«5  lo  o  '*  to  i^  i~  C'  lo  lo.  CO  lo  Tj<  I-  cc  I-  ai  X'  cj  CO  CO  ~'  ^  CO  oi  rH  ^  lo  O.I  rH  CI  ai 

1-^  t— lI-^I— It— l^^I— ii—lCJi— lr-(i— Ir-li— ( 


CI     '^    to    »U'    U"^!    «t.'     ' '    •-.'    '-NJ    t""    l.'J    T    l-~-    L^    ^71    (^NJ    -^      ^  .     _  .      _  — »     ,  »  „^  ,^     ^^    ^  -    ,^,     .      ,    ... 

co•.o^^r-^L':ll^c:'COooococot^QOt^^t^tOl^c■csc^^tooi•*'55^^tO'>^to<xto 

CJ^i-H^Ol  to  to  fO_tO  O':  CJ  t~  to  10  10  t~  rfl  00  ^  rH  Cvl^tO  l--^tO  ■*  to  10  <^^'-^  GO  to  C35  to  to 

t-Ti-T     cri-Ti-T  i-T      t-rio^^'~->*'io"oo'~o'~to'-*"'--rL':rcrt-^co"~o"io'" 


t^i— itOlOCOt~C<|rH0000000000000  10lO-*IC^lOCO'+iCCCOO 
TtlOC^-10iOOOlO^HtOCOtOt^CO-^C.1tOcOOcO<3i<31lO^OlOCitO-rt<OCC1GCO 


^-^    ^ — '     ^-^    ^ — >    ^ — '    i«_^    ^— ^    >^ >    k J    ^— '    i.^    "-.^    it  J    UJ    ^T^    ' •     ^T"    *1.     U'J    ^T"    '. 

tOCOtOt^CO-^C.1tOcOOcO<3i<31lO^OlOCitO-rt<OCC 

CO  00  o^co  to^io  t-^t^to^ioiOi-^Qcrototooot^cvit 
i^  c;  i~  as  to  -rjTco  to^t-Tro  to"'*  i-h  io~-+"co'"'-<"cr'*'to'~t 

f*^    r^>    — +1    r — 1    1^1    , — \    ^^    / — ^    r^i    r^    I    »44    / — s    *^    ^ — n    1    r\  1    ^<-^    1    »,— k    _ 


a5_  eo__  --H^  i-__  o_  o_  00^  ^__  ca_ 

to't^cf  rH"i(7~io"^'"co  c^i  i^  o  i~  as  to  -*' CO  tdV-Tro  to"'*  i—1 10"-+' VT'-^'cT'*  to"  to'to"  to' 

OtOC:itOI-.OCOOO-*CvltOCO-*OCaOt— lOOOOr-t-rHOcOOT— (C^ltOi— llO^t-HCO 

■  ^  -"  ■-        t^  cc^cj_co  i-i  CO  in  Oi  cj  to_^co  to  in  05  '*  cj  QC  cvi  CO  CI  t-  cj  t^ 

cfcJ"  I-Tr-Tio" 


Oi  I— I  CI  l^  o 


I  GO   I- 


•*  t^  to  CJ  ^  ^  CO  CO 


tn 

CO 

a> 

^-' 

^ 

CO 

n 

=1 

pq 

CO 

j5 

<K 

^ 

^ 

CQ 

w 

ITf 

0; 

dl 

^ 

cc 

> 

^ 

w 

1^ 

0 

tn 

h 

W^ 

t3 

a 

^ 

toi— i^i^oicicooi^ocoooooooooooavasGccor-itoLot^Gco 
-*GOc>]iccMi^a3i.oc'':i^ocoGOi^GO'-HOGO*'oioiococoa3'-HcO'Oio^crcro 
co_i--_.-H^c<i^cj^o>_t-_co_^i--^T-H^ai__i~-_io_^to_^ca^co_^GO  t^  '"l,'^  '"L'^l,'^  '*^^  ci^  tJh  cm  10  co  o  o^ 
crt£r^"i~-"~arci  -^'as'io  o~to  '*  t-'"-*"to'~t^  aTo'-^^o^o  o''to"t-ro''-<'arcvrGo''-H  to'^*" 

l^  OS  Oi  as  L^  Cvl  O  ^  to  10  C^l  L^  to  ^H  10  05  O  to  LO  O  O  to  IC  O  't  C'  to  CI  CO'  OS  l^  CI 
aS^CO^^'+l  CO_^CJ^rH_rH^CO  LO^  tO__ d_  i-H^ l^  '^^ '-^  ^^^^"^  ^^"^  '■~~^'-''  O  >— I  t^  '^^'*  '^  ■*•  OC  OS  ""H^ 
lO~lCl  OD'c^rTtTlO  t— I  -"^l  r-TcO  CO  r-TrtH^t^  ■>#~Co'~C<rto'o  to"  Cvf  0~ '-h' lO   to"  oo' >-<' lO~  o' oT 

i-ii-Hi— ii— (cai— icM^titO'^ciojcvii— icoi-t 


GOX.1— iCOtOCOCOL^OOOOOOOOOOOOOOi— lOlOCOt^OODTfOlO 

c^i  ^  OS  'n  to  >o  OS  '-I  CO  CO  'f  'ti  CO  t--  as  i^  10  to  05  00  i^  CI  '-H  i-H  cj  t-^  c."]  to  Tt<  10  l^  o 
oo^ira^Go^GO_^oq^oo_^as__'*_GO_^io^o^co_^c.T^co_^^  c-i  i-n^o  cot~oiioc]otoocotooo'*aso 

cT-rtTco  a5Cicoo'*i-tH-+iiOGC  CO  io^a3"cri--'"to^to'"t--'oroo'~i--'~T-rc\ro~co'~csrort--'''*~oD~ 

irat^asCOtOCOOi'-HCOtOl^COCllOCOOICJCOrHt^COt^OT— IC0>O'*05C0COtDC; 

m^as_^io^aj_co__'--(^a5^c.i^^__to_^os_^io^o^i-H^i-H^^  1— i  rn^to  co^io  otoaooiosGOr-HioTHcooD 
Go'^-t^^cvTcTco  irTcrcf  ^  rH"-rt^Go'~I-^a^o'^to"t-~'~-t^^a^c^^o'~a^r^*"l-^lx^^^'~co'"co'^o~c^co'"l-^ 

CJCJCJCJCOCOCOtOCOCCICO'— ICvJCQCOCO-<!tl-*CJCO'*ICvlCO'*kntOmtOCOCM-*Cq 


cq  CJ 
1^  l^ 

CO  10 


tOCM-OtOr-iasOOOOOOOOOOOOOOOt^Ot^TtlOOOOtOCOO 

lOrHOCOOCqClCOCJi— IO-^00i— iOCOtOtOlOCOQOO'-HCO'— imTjiasdo 
tO_^tO__^_^i-H^IO_C]^CO_^0_-*_^t-^Tt<_^Tl<_rH^i-H^tO  tO  ai  10^ t^  "—I  C]  CJ^tO^GO  O'  '^^Cvl  tO  CO   C' 

i^  -*"^  OS  00  o  10  o~i-0  OS  o  o't-Tqo'^'-j'go' io~co"^co'~^'~i---'''-rio"c.f  go" to'"'*  cT  10' cT 
tociGO'-^cot— lasiootococoi— (^ioto^<-*^ascO'— itot—  oc^aslOl.'^l- 
os_^co__c.]^■*_l--^»c_-*_o^'-^^■*^I-'_^'#^T-^_>o  C'  00__as  CO__d^rH  ^^LOOOOGOCvl'rf'TfC] 
CI  as"  CO  irai>.ocoto-*cai-^  r^cot^'^^^ooaocs't>^-^v^^cx3^t>^y-^cSi^<s 
coi-iCJcoco'^'-icacjeoo5Tji-rticacoo5t^i>-toinTtiio'oooTt<TtttDtD-*CM 


LOmCIO-^OlO'— 'COOOOOOOCOOOOOQOrtHt^COCOOiOStOt^lO 
O0^O^-hG0O'-^'0l0l^'-^Q0ast0C0'— IGO^CvlOSCOLOOO'-HlOl^l^CO'— ICItO 

o\  10  '^^ci^o^as^i— i^as_^ci_co_^io^io_ci_i— I  co_^as  i^ireco"— 'oincMi— itotoocC'^tDoos 
OS  CO  <3  t-  CO  ^H  1^  L^  ^H  ai  >— I  w  CO  c-f  t— I  -^'o^io  eo^tcTc^i  co"io"T)H"o">-rGo"co'"co"to"co~o'~ 
loas'-Hcasr-io^ioajt^'— 'oooO'#Qo--t<as-^tOGCocoTtit~GotOLOcvi'*to 
c-i  to_^GO_^GO  to  as  00  co_^o_rH^o^to_^a5_^io_o^d  -*  ci^o  t^ire^oco-^coo-^oocii-H 

i-Ti-Ti-T  r-H  1— I  1— (  eg  ca  ovT rtrr)<' 10" to" to" t^oTo'T-To^o^ cm" o" as" r-Ti-Tc-f'-rto' 


co-tL'^toi^ooasOrH(Mco-*»oeot~ooosOt-ic^icO'ti>otoi— oooiOi-icicoTtH 
i-i^i^i-i^i^i^QoooQoooGoooGOGoooooaiasososososcsoiasasooooo 

GOCOGOGOGOOOoOXGOOOGOOOOOOOaOOOOOGCOOaOGOOOOOGOOOOOOOasaSCJSasOS 
'"(r^'-^riM'"''— Ir^rirHr-li— li— li— Ir-irHi—lr-ll— ll-Hi— li— li-li— li— li-lr-lr-li-li— li-lT-l 

319 


320  ATLANTIC    PORT   DIFFERENTIALS 

[56]  While  receipts  of  grain  and  grain  products  at  Buffalo  are  much 
greater  than  at  other  eastern  lake  ports  still  there  is  a  substantial 
movement  to  Erie,  Pennsylvania,  and  a  smaller  movement  to  Fairport, 
Ohio,  in  addition  to  a  large  movement  through  the  Welland  Canal  to 
I)oints  east  of  Buffalo.  It  will  be  seen,  therefore,  that  this  traffic  has 
been  for  many  years  and  is  still  of  very  great  volume. 

Flour  shipped  by  the  lake  and  rail  route  always  moves  from  the 
point  of  origin  to  the  Atlantic  seaboard  upon  a  through  bill  of  lading 
at  a  through  rate ;  when  the  destination  is  a  foreign  one  the  shipment 
is  usually  upon  a  through  bill  to  the  foreign  point.  While,  therefore, 
large  (juantities  of  this  flour  are  stored  at  Buffalo  and  other  lake  ports 
temporarily  before  being  taken  forward  by  rail,  this  storage  is  merely 
an  incident  to  the  carriage.  The  traffic  in  no  sense  originates  at 
Buffalo.  All  these  through  lake-and-rail  rates  on  flour  whether  for  ex- 
port or  for  domestic  consumption  recognize  a  differential  of  two  and 
three  cents  to  Philadelphia  and  Baltimore. 

In  the  handling  of  grain  this  is  entirely  different.  The  shipment 
from  the  point  of  origin  to  the  lake  port  is  a  local  transaction.  The 
transportation  from  the  western  lake  port  to  Buffalo  is  another  inde- 
pendent transaction  and  the  grain  is  then  taken  from  Buffalo  to  the 
seaboard,  whether  for  export  or  for  domestic  consumption,  at  a  new 
rate,  which  is  usually  termed  an  ex-lake  rate,  and  which  applies  to 
grain  which  has  reached  Buffalo  via  the  lakes.  The  actual  rate  at 
which  this  grain  moves  for  export  is  one  applicable  to  lots  of  8,000 
bushels  and  is  so  much  per  bushel.  The  question  before  us  is,  should 
this  export  rate  be  the  same  to  all  the  ports,  or  should  Baltimore  or 
Philadelphia  enjoy  a  differential  upon  this  as  they  do  upon  all-rail 
grain  ? 

This  ex-lake  business  was  not  referred  to  in  the  agreement  of  1877 
nor  was  it  mentioned  in  the  Fink  Report  or  the  award  of  the  Advisory 
Commission.  The  reason  for  this  is  not  very  clear.  It  appears  from 
the  table  above  given  that  in  1877  the  receipts  of  flour  at  Buffalo  were 
700,000  barrels  and  of  grain  in  round  numbers  63,000,000  bushels,  and 
we  know  from  further  evidence  in  the  case  that  nearly  6,000,000 
bushels  of  grain  were  [57]  handled  that  year  through  the  port  of  Erie 
where  the  Pennsylvania  Railroad  had  constructed  an  elevator  as  early 
as  1869.  Mr.  Guilford  indicates  that  this  grain  was  carried  mostly  by 
canal  in  these  early  days,  but  the  tables  in  evidence  show  that  only 
39,000,000  bushels  of  wheat  and  corn  were  received  by  canal  at  New 
York  during  the  year  1877  against  63,000,000  received  at  Buffalo,  and 
that  in  1880,  68,000,000  bushels  of  wheat  and  corn  reached  New  York 
by  canal  while  the  receipts  at  Buffalo  were  104,000,000  bushels.     It  is 


IN  THE  MATTER  OF  DIFFERENTIAL  RATES  321 

possible  that  Philadelphia  and  Baltimore  lines  did  not  at  that  time 
have  working  arrangements  by  which  they  could  reach  Buffalo ;  at  any 
rate  this  ex-lake  differential  evidently  was  not  a  thing  of  importance 
until  about  1890.  ]\Ir.  Guilford  states  that  the  railroads  determined 
to  compete  with  the  canal  for  this  Buffalo  grain  in  1891  and  that  this 
brought  the  differential  into  prominence.  Mr.  Thayer,  testifying  for 
the  Pennsylvania  Lines,  states  that  an  agreement  was  formed  as  early 
as  1889  b}^  which  a  differential  was  allowed  to  Philadelphia  and  Balti- 
more upon  this  ex-lake  grain,  not  to  exceed  the  amount  of  the  all-rail 
differential.  According  to  the  testimony  of  Mr.  Guilford  the  differ- 
ential from  about  1891  to  1895  was  one-half  cent  per  bushel  on  heavy 
grains.  In  1895  rates  were  badly  demoralized  and  no  fixed  schedule 
was  maintained,  but  in  1896  the  Joint  Traffic  Association,  which  had 
been  organized  for  the  purpose  of  fixing  and  maintaining  rates,  estab- 
lished a  differential  of  1  cent  per  bushel  on  ex-lake  grain  in  favor  of 
Baltimore  and  Philadelphia.  This  continued  in  effect  until  1898  when 
the  Joint  Traffic  Association  reversed  its  former  holding  and  abolished 
the  differential  altogether.  Witnesses  for  New  York  stated  that  from 
this  time  until  the  fall  of  1903  no  differential  was  allowed  Philadelphia 
or  Baltimore  from  Buffalo  or  Erie.  Mr.  Thayer  states  that  the  differ- 
ential was  abolished  on  cargo  shipments  in  1898  but  that  it  continued 
to  be  applied  to  berth  shipments  until  1900. 

We  are  inclined  to  think  that  a  differential  was  insisted  upon  and 
generally  taken,  when  rate  conditions  permitted,  by  the  Philadelphia 
and  Baltimore  lines  until  the  action  of  the  Joint  Traffic  Association  in 
1898.  It  may  be  that  this  differential  was  still  applied  for  some  little 
time  by  Philadelphia  and  Baltimore  [58]  lines  to  berth  business.  For 
a  time  Philadelphia  lines  remitted  the  elevator  charges  at  that  port  on 
ex-lake  grain.  From  1900  to  the  fall  of  1903  no  differential  was 
claimed  in  favor  of  Baltimore  and  Philadelphia  from  either  Buffalo  or 
Erie,  but  it  appears  that  the  Baltimore  &  Ohio,  which  owns  an  elevator 
at  Fairport,  Ohio,  took  during  all  that  time  a  differential  of  4-10  of  one 
cent  per  bushel  upon  Baltimore  shipments  through  that  port. 

It  may  be  generally  remarked  with  respect  to  these  ex-lake  rates 
that  competition  was  strong  and  that  rates  were  in  consequence  very 
much  demoralized  until  the  formation  of  what  has  been  known  as  the 
Buffalo  Grain  Pool.  This  is  an  association  of  lines  transporting  grain 
from  Buffalo  to  New  York  through  which  the  traffic  is  divided  in  given 
proportions.  It  was  said  in  this  case,  and  had  appeared  in  former  in- 
vestigations by  this  Commission,  that  previous  to  the  organization  of 
this  committee  or  association,  grain  had  been  carried  from  Buffalo  to 
New  York  and  Boston  at  as  low  as  21/2  cents  a  bushel,  but  since  the  es- 

21 


322 


ATLANTIC    PORT   DIFFERENTIALS 


tablishnient  of  this  arrangement  rates  have  been  advanced  and  well 
maintained.  Philadelphia  and  Baltimore  lines  have  at  no  time  been 
parties  to  this  organization  but  have  apparently  maintained  the  rates 
established  by  it. 

The  distance  from  Buffalo  to  New  York.  Philadelphia  and  Baltimore 
is  almost  exactly  the  same  being  about  400  miles.  Buffalo  is  not  in 
differential  territory  and  so  far  as  we  can  learn  no  differential  rates 
prevail  to  the  various  ports.  Large  quantities  of  ex-lake  wheat  are 
ground  at  Buffalo,  but  the  product  in  all  cases  goes  forward  whether 
for  domestic  consumption  or  export  at  the  same  rate  to  the  three  ports. 

The  Baltimore  &  Ohio  Railroad  Company  owns  and  maintains  an 
elevator  at  Fairport,  Ohio,  as  just  said,  through  which  it  handles  a 
limited  quantity  of  ex-lake  grain.  There  appears  to  be  considerable 
elevator  capacity  at  Erie,  Pennsylvania,  and  both  the  Baltimore  &  Ohio 
and  the  Pennsylvania  handle  grain  through  this  lake  port.  The  quan- 
tity so  handled  is  considerable,  having  been  as  high  as  16,000,000 
bushels  per  year ;  but  this  movement  seems  to  have  declined  in  recent 
years  and  was  always  insignificant  in  comparison  with  Buffalo.  Fair- 
port  and  Erie  [59]  are  both  in  differential  territory,  but  it  seemed  to 
be  the  opinion  of  all  witnesses  that  upon  export  grain  the  rate  from  the 
three  ports  should  be  the  same. 

The  table  below  gives  in  percentages  the  receipts  from  1892  to  1903 
inclusive,  of  ex-lake  grain  at  New  York,  Philadelphia  and  Baltimore. 

TABLE  NO.  9. 


To  Ne\ii 
Year  York 

From  Buffalo 


To  Philadelphia. 


Erie. 


Buflfalo.       Total. 


To  Baltimore. 


Erie.        Fairport.       Total. 


1892  ... 

74.8 

9.4 

5.1 

14.5 

1893  ... 

65.7 

14.4 

7.2 

21.6 

1894  ... 

67.1 

10.6 

14.5 

25.1 

1895  .  .  . 

88.8 

1.8 

4.5 

6.3 

1896  . .  . 

68.9 

5.7 

10.7 

16.4 

1897  ... 

75.4 

5.1 

6.2 

11.3 

1898  . .  . 

77.4 

6.0 

9.0 

13.0 

1899  ... 

82.0 

6.2 

9.1 

15.3 

1900  ... 

76.4 

5.8 

8.8 

14.6 

1901  .  .  . 

84.7 

2.2 

10.2 

12.4 

1902  ... 

77.0 

2.0 

16.4 

18.4 

1903 

6  mos. 

82.0 

2.4 

12.8 

15.2 

9.9 

.8 

12.4 

.3 

6.8 

1.0 

4.7 

.2 

6.6 

8.1 

6.4 

6.9 

4.1 

3.5 

1.4 

1.3 

4.5 

4.5 

.1 

2.8 

3.2 

1.4 

2.8 

10.7 

12.7 

7.8 

4.9 

14.7 

13.3 

7.6 

2.7 

9.0 

2.9 

4.6 

2.8 


It  was  said  on  behalf  of  Boston  that  the  elevation  charges  at  that 
port  were  higher  than  at  Baltimore  and  Philadelphia,  and  such  appears 
to  be  the  fact.  The  elevation  charge  at  the  two  latter  cities  is  three- 
fourths  of  a  cent  per  bushel,  including  free  storage  for  the  first  twenty 


IN  THE  MATTER  OF  DIFFERENTIAL  RATES  323 

days,  while  for  the  same  service  at  Boston  the  charge  is  nine-tonths  of 
a  cent  per  bushel.  Against  this,  however,  is  an  offset  which  leaves  a 
difference  against  Boston  of  .12  of  a  cent  per  bushel.  We  understand 
that  the  elevators  at  Boston  are  owned  and  operated  by  the  railroads. 

On  the  part  of  Baltimore  and  Philadelphia  it  was  urged  that  the 
cost  of  insurance  was  greater  from  those  ports  than  from  Boston  or 
New  York.  It  appears  that  the  quoted  rates  are  the  same  from  all  four 
ports,  but  from  actual  transactions  it  rather  seems  that  in  many  in- 
stances marine  insurance  is  higher  from  Baltimore  and  probably  Phila- 
delphia than  from  the  other  two  ports.  This  would  be  in  the  long 
run  a  real  disadvantage  [60]  against  these  ports,  but  there  is  no  testi- 
mony in  this  case  from  which  we  can  place  any  exact  figure  upon  that 
disadvantage. 

Considerable  testimony  was  introduced  to  show  that  iji  the  past  rates 
haxi  not  been  maintained.  This  is  a  matter  of  common  knowledge.  It 
appeared  in  the  former  investigation  before  us  that  for  a  short  time 
after  the  Act  to  Regulate  Commerce  took  effect  published  schedules 
were  fairly  well  observed  and  that  for  a  few  weeks  and  perhaps  months 
after  the  organization  of  the  Joint  Traffic  Association  these  grain  rates 
were  pretty  well  maintained ;  but  it  was  practically  conceded  that  at 
all  other  times  they  had  been  more  or  less  departed  from.  It  is  our 
impression,  however,  that  there  has  at  all  times  been  a  substantial  dif- 
ference in  favor  of  the  differential  ports.  There  was  upon  the  pub- 
lished schedule  an  actual  differential  and  lines  leading  to  Baltimore 
and  Philadelphia  have  probably  departed  as  much  from  the  rate  as 
their  competitors  to  New  York.  At  the  same  time,  as  we  observed  in 
the  former  case,  the  fact  that  rates  have  not  been  maintained  has  made 
it  impossible  to  determine  the  actual  effect  of  these  differentials  upon 
the  movement  of  this  traffic.  It  is  now  said  that  since  the  spring  of 
1902  rates  have  been  maintained  and  we  are  inclined  to  the  opinion 
that  these  grain  rates  in  the  main  have  been. 

This  investigation  nominally  covered  import  as  well  as  export  traffic 
and  some  testimony  was  introduced  by  the  New  York  interests  upon 
this  branch  of  the  inquiry ;  but  no  evidence  on  this  point  was  offered 
by  the  other  ports  and  the  subject  has  been  scarcely  referred  to  in 
argument.  Under  these  circumstances  it  would  not  be  profitable  to 
attempt  any  discussion  of  that  matter. 

CONCLUSIONS. 

The  controversy  before  us  relates  to  what  are  known  as  the  "Port 
differentials"  and  is  one  of  long  standing.  The  dispute  began  when 
rival  lines  of  railway,  first  connected  the  West  with  the  four  At- 


324  ATLANTIC    PORT   DIFFERENTIALS 

lantie  ports  involved.  It  has  produced  numerous  rate  wars,  has  been 
the  subject  of  arbitration,  has  been  considered  by  this  Commission  upon 
complaint  of  one  locality  and  is  now  [61]  under  investigation  by  us 
again  at  the  general  request  of  the  four  ports  especially  interested  and 
of  many  interior  shippers. 

The  question  itself  is  readily  comprehended.  That  section  bounded 
on  the  east  by  a  line  drawn  from  Pittsburgh  to  Buffalo,  on  the  south 
by  the  Ohio  River,  on  the  west  by  the  ]\Iississippi  River  and  on  the 
north  by  the  Great  Lakes  and  a  line  drawn  west  from  Chicago  to 
Dubuque  is  known  as  differential  territory.  Rates  between  points  in 
this  territory  and  New  York  city  are  based  upon  the  Chicago-New  York 
rate;  that  is,  the  rate  between  any  point  in  this  territory  and  New 
York  is  either  the  same  as  the  Chicago  rate  or  a  certain  percentage  of 
that  rate.  To  other  points  upon  the  Atlantic  seaboard  the  rate  is 
higher  or  lower  than  tliat  to  New  York  by  a  given  number  of  cents  per 
hundred  pounds.  Rates  upon  all  classes  and  all  commodities,  with  the 
exception  of  grain  and  iron  articles,  are  2  cents  lower  to  Philadelphia 
and  3  cents  lower  to  Baltimore  than  to  New  York.  To  Boston  rates 
are  the  same  as  to  New  York  on  export  traffic  while  on  domestic  traffic 
they  are  higher  by  arbitrary  amounts  ranging  from  7  cents  per  hun- 
dred pounds  on  first  class  to  2  cents  on  sixth  class  and  most,  if  not  all, 
commodities.  These  arbitrarj^  differences  above  or  below  the  New 
York  rate  are  termed  in  this  proceeding  differentials.  No  question  is 
made  as  to  the  propriety  of  these  differentials  on  domestic  traffic  but 
it  is  insisted  that  they  should  not  be  allowed  on  export  business. 

It  should  be  observed  that  while  these  differentials  apply  in  theory 
only  to  traffic  from  differential  territory  they  in  fact  apply  to  all 
traffic  which  passes  through  this  territory.  A  glance  at  the  railroad 
map  of  the  country  shows  that  this  includes  virtually  all  traffic  which, 
originating  west  of  Buffalo  and  Pittsburgh,  passes  out  through  the 
Atlantic  ports  north  of  Norfolk :  and  it  will  further  be  seen  by  refer- 
ence to  the  tables  given  in  the  findings  of  fact  that  this  embraces  a  very 
considerable  part  of  the  rail  movement  by  which  our  entire  exports 
reach  the  seaboard. 

"When  the  Commission  examined  this  subject  in  the  Produce  Ex- 
change Case,  7  I.  C.  C.  Rep.  612  (ante,  p.  157),  its  only  function  was  to 
determine  whether  the  Act  to  Regulate  Commerce  had  been  violated. 
Our  relation  to  the  subject  to-day  is  a  broader  one,  certainly  if  [62] 
we  comply  with  the  request  of  the  petitioners  at  whose  instigation  this 
proceeding  was  instituted.  We  are  to  say,  not  whether  these  differ- 
entials are  lawful  merely,  but  whether  on  the  whole,  considering  the 
interests  of  all  parties,  they  are  fair.     Counsel  for  the  city  of  New 


IN  THE  MATTER  OP  DIFFERENTIAL  RATES  325 

York  in  commenting  upon  this  remarked  that  this  controversy  might, 
therefore,  for  the  first  time  be  settled  upon  correct  fundamental  prin- 
ciples. We  have  endeavored  to  find  some  fundamental  principle  by 
the  application  of  which  this  dispute  might  be  laid  at  rest,  but  entirely 
without  success.  It  is  said  that  a  fair  differential  is  one  which  would 
give  to  these  several  ports  the  traffic  to  which  they  are  entitled.  It 
is  also  said  that  these  several  ports  are  entitled  to  what  of  this  traffic 
they  can  obtain  under  a  fair  differential.  New  York  urges  that  its 
facilities  upon  the  ocean  must  not  be  interfered  with,  while  Baltimore 
and  Philadelphia  assert  with  equal  positiveness  that  they  must  not  be 
deprived  of  their  advantages  upon  the  land.  While  there  is  no  funda- 
mental principle,  however,  which  can  be  applied  there  are  certain  fun- 
damental considerations  which  should  be  kept  in  mind. 

If  it  can  be  properlj^  done,  these  ports  should  all  be  kept  open  for 
the  transaction  of  this  export  business  upon  such  terms  that  each  one 
may  fairly  compete  for  it.  No  marked  advantage  should  be  given, 
certainly  not  by  the  creation  of  artificial  conditions,  to  any  one  port 
over  the  other.  The  ideal  condition  would  be  the  establishment  of 
such  rates  that  enterprise  at  either  port  in  the  way  of  improvement  in 
service  or  facilities  might  be  rewarded  by  increased  business  and  that 
there  might  exist  that  healthy  struggle  of  locality  against  locality 
Viiiich  is  the  best  security  for  proper  commercial  development.  This  is 
justly  demanded  by  the  interests  of  the  communities  involved. 

In  disposing  of  this  question  the  interests  of  the  carriers  w^hich  serve 
these  communities  should  be  none  the  less  kept  in  view.  If,  again,  it 
can  be  properly  done,  these  rates  should  be  so  adjusted  that  this  com- 
petitive traf^e  will  be  fairly  distributed  between  the  different  lines  of 
railway  W'hich  serve  these  ports.  Each  one  of  these  four  cities  is 
reached  by  two  or  more  great  railway  systems.  The  prosperity  of 
these  cities  and  systems  cannot  be  separated.  The  ability  of  a  railroad 
to  adequately  dis-  [63]  charge  its  duty  for  a  reasonable  charge  depends 
upon  the  business  which  it  can  obtain,  and  no  one  of  these  systems 
should  be  deprived  of  its  fair  portion  of  this  enormous  export  traffic. 
The  purpose  of  these  differentials  from  the  first  has  been  to  distribute 
this  business  betw^een  the  different  carriers  and  we  said  in  our  former 
report  that  this  w^as  not  improper  unless  the  means  used  w-ere  im- 
proper. 

It  should  be  noted  that  this  discussion  is  confined  entirely  to  the 
four  ports,  Boston,  New  York,  Philadelphia  and  Baltimore.  While 
others  are  directly  affected  by  these  differentials  they  have  not  been 
represented  upon  this  hearing  and  are  not  considered  except  in  so  far 


326  ATLANTIC    PORT    DIFFERENTIALS 

as  it  may  be  necessary  to  keep  in  mind  the  effect  of  our  conclusions 
here  upon  conditions  elsewhere. 

No  fact  has  been  more  persistently  urged  upon  our  attention  than 
the  location  of  Baltimore  and  Philadelphia,  as  compared  with  New 
York  and  Boston  in  point  of  distance.  Baltimore  is  111  miles  and 
Philadelphia  90  miles  nearer  than  New  York  to  Chicago.  The  greater 
j>art  of  the  traffic  to  which  these  differentials  apply  does  not  originate 
at  Chicago,  but  we  have  seen  that  Chicago  may  be  taken  as  a  repre- 
sentative point  of  origin  without  injustice  to  New  York,  This  differ- 
ence in  distance,  if  there  were  no  competitive  conditions,  would  justify 
a  lower  rate  to  Philadelphia  and  a  still  lower  rate  to  Baltimore. 

These  differentials  have  undoubtedly  been  established  in  the  past 
with  a  view  almost  entirely  to  their  influence  upon  the  movement  of 
export  business.  It  is,  however,  of  importance  that  rates  between  these 
cities  and  the  West  should  be  fairly  adjusted  with  respect  to  domestic 
traffic.  If  the  supplies  with  which  the  artisans  of  Baltimore  work  and 
upon  which  the  population  of  Baltimore  lives  are  transported  for  a 
less  cost  from  the  West  to  Baltimore  while  the  products  of  its  factories 
are  sent  back  at  a  less  cost  to  be  consumed  in  the  West,  this  would  be 
an  important  element  making  for  the  prosperity  of  that  locality  as 
compared  with  other  localities  where  the  cost  of  transportation  was 
more.  Now  if  there  had  been  no  export  business  in  the  past,  if  these 
domestic  rates  had  been  adjusted  solely  with  a  view  to  what  was  right 
between  the  communities,  it  is  altogether  probable  that  the  differentials 
in  favor  of  Baltimore  and  Philadelphia  would  have  [64]  been  even 
greater  than  they  are  to-day.  When  the  differential  on  grain  Avas 
reduced  in  1899  and  again  when  that  on  iron  articles  was  halved  in 
1904,  the  former  differences  on  domestic  rates  were  left  in  effect.  There 
can  be  little  doubt,  and  we  have  so  stated  in  the  findings  of  fact,  that 
a  fair  recognition  of  the  advantage  of  these  two  southern  ports  in  the 
matter  of  distance  would  entitle  them  to  as  great  a  differential  as  three 
cents  to  Baltimore  and  two  cents  to  Philadelphia. 

It  should  be  further  noticed  that  not  only  have  these  communities, 
when  considered  as  points  of  final  destination,  a  right  to  a  lower  rate 
than  New  York  on  traffic  from  this  territory,  but  the  carriers  which 
transport  that  traffic  may  properly  exact  from  shippers  to  New  York 
a  higher  rate,  if  they  see  fit.  The  Pennsylvania  Kailroad  is  the  short 
line  to  New  York.  Traffic  over  that  line  for  New  York  passes  through 
Philadelphia  and  90  miles  beyond.  The  expenses  of  delivery  at  New 
York  are  materially  more  than  in  Philadelphia.  There  is  no  just  prin- 
ciple which  would  compel  this  company  against  its  will  to  apply  at  New 
York  the  same  rate  as  at  Philadelphia  when  the  cost  of  rendering  that 


IN  THE  MATTER  OP  DIFFERENTIAL  RATES  327 

service  is  distinctly  greater.  It  might  as  a  matter  of  competition  see 
fit  to  do  so,  but  it  could  not  with  justice  be  compelled  to. 

If  these  differentials  fairly  recognize  the  advantages  of  Baltimore 
and  Philadelphia,  upon  what  theory  can  they  be  reduced  or  abolished  ? 
It  is  said  that  these  cities  labor  under  certain  disadvantages  in  the  waj' 
of  water  transportation  as  compared  with  New  York  and  Boston. 
Now,  what  can  be  more  just  than  to  give  to  each  port  the  inland  rate 
to  which  its  location  entitles  it  and  to  let  it  obtain  such  portion  of  this 
export  traffic  as  its  ocean  facilities  can  win  for  it  ?  Does  not  this  award 
to  each  locality  the  exact  benefit  of  its  location  and  is  not  any  other 
rule  to  an  extent  unjust  ? 

The  answer  is  found  in  the  fact  that  this  traffic  does  not  stop  at  the 
seaboard  but  is  carried  to  foreign  destinations.  The  port  of  export  is 
but  a  single  station  as  it  were  upon  the  through  line. 

This  traffic  in  point  of  fact  originates  at  a  great  number  of  interior 
points  and  reaches  numerous  foreign  destinations,  but  we  may  assume 
for  the  purpose  of  illustration  that  it  all  comes  [65]  from  Chicago 
and  all  goes  to  Liverpool.  It  is  apparent  that  it  may  be  trans- 
ported between  these  points  by  any  of  the  four  ports  in  question.  The 
distance  by  rail  is  somewhat  shorter  to  Baltimore  and  Philadelphia 
than  to  Boston  and  New  York.  Upon  the  other  hand  the  water  dis- 
tance is  somewhat  less  from  Boston  and  New  York  than  from  Phila- 
delphia and  Baltimore.  The  entire  through  distance  does  not  greatly 
vary.  In  other  words  this  traffic  is  fairly  competitive  and  rates  ought, 
therefore,  to  be  so  adjusted  that  rival  routes  can  fairly  compete  for  it. 

Apply  for  a  moment  the  rule  suggested  by  Baltimore  and  Philadel- 
phia to  the  movement  of  this  traffic.  The  domestic  rate  to  Baltimore 
IS  three  cents  lower  and  to  Philadelphia  two  cents  lower  than  to  New 
York.  The  domestic  rate  to  Boston  is  two  cents  higher  than  to  New 
York  upon  low  grade  freight  and  considerably  more  upon  the  higher 
classes.  Now,  what  would  be  the  result  if  carriers  were  compelled  to 
charge  their  domestic  rates  upon  export  traffic?  Plainly  it  would 
shut  up  the  port  of  Boston.  This  fact  has  been  obvious  from  the  first, 
and  it  has  always  been  conceded  that  export  rail  rates  to  Boston  might 
be  lower  than  domestic  rates  and  not  higher  than  export  rates  to  New 
York,  This  was  so  specified  in  the  agreement  of  1877.  It  was  recog- 
nized as  necessary  by  the  award  of  the  Advisory  Commission.  It  has 
been  formally  approved  in  two  instances  by  this  Connnission :  In  the 
Matter  of  the  Export  Trade  of  Boston,  1  I.  C.  C.  Rep.  24,  1  Inters. 
Com.  Eep.  25  {ante,  p.  105)  ;  Kemhle  v.  Boston  &  Albany  Railroad 
Company,  8  I.  C.  C.  Rep.  110  {ante,  p.  231).     Nothing  can  be  more 


328  ATLANTIC    PORT   DIFFERENTIALS 

certain  than  that  these  inland  rates  upon  export  traffic  should  be 
treated  as  a  part  of  the  entire  through  rate. 

The  real  question  is  on  what  basis  shall  rates  be  equalized  through 
the  various  ports.  New  York  and  Boston  insist  that  the  through  rates 
should  be  made  the  same  in  amount  by  all  the  ports.  The  through  rate 
is  made  by  adding  together  the  inland  rail  rate  from  the  interior  to  the 
port  of  export  and  the  water  rate  from  the  port  of  export  to  the  for- 
eign destination.  These  localities  contend  that  if  the  water  rate  from 
a  given  port  is  higher  the  rail  rate  to  that  port  may  be  correspondingly 
lower,  but  only  sufficiently  lower  to  make  the  through  rate  the  same. 
They  further  contend  that  water  rates  are  in  fact  substantially  [66]  the 
same  from  Baltimore  and  Philadelphia  as  from  Boston  and  New  York, 
and  that,  therefore,  the  inland  rail  rates  to  those  ports  should  also  be 
the  same.  Baltimore  and  Philadelphia  urge  that  there  are  certain  ad- 
vantages at  New  York  and  Boston  in  the  water  route  which  upon  the 
same  through  rate  would  attract  traffic  to  those  ports  at  their  expense, 
and  they  urge  that  these  advantages  shall  also  be  equalized  so  that  not 
the  through  rate  but  the  advantages  of  transportation  through  the 
several  ports  shall  be  made  equal. 

The  purpose  is  to  permit  these  carriers  and  the  ports  which  they 
serve  to  compete  for  this  traffic.  The  rates  are  to  be  so  adjusted  that 
there  can  be  fair  competition  for  this  business  via  all  the  ports,  so  that 
no  one  shall  possess  a  distinct  advantage  over  the  other.  To  accom- 
plish this  result  Boston  is  allowed  to  charge  a  lower  export  rate  than 
its  domestic  rate.  New  York  is  also  permitted  in  some  instances  to 
apply  a  lower  differential  to  export  than  is  fixed  for  domestic  traffic. 
Now,  when  New  York  is  allowed  to  reduce  this  differential  on  export 
traffic  there  is  taken  away  from  Baltimore  a  part  of  its  natural  ad- 
vantages for  the  benefit  of  New  York  in  order  that  New  York  may 
compete  for  this  traffic.  But  just  as  Baltimore  has  an  advantage  in 
distance,  so  New  York  has  certain  advantages  in  ocean  facilities.  If 
now  Baltimore  is  required  to  sacrifice  its  superiority  upon  the  land 
for  the  benefit  of  New  York  why  should  not  New  York  be  required  to 
give  up  some  portion  of  its  superiority  on  the  water  for  the  benefit  of 
Baltimore  1 

We  do  not  wish  to  be  understood  as  saying  that  this  principle  should 
be  extended  to  the  making  of  rail  rates  between  competing  lines.  It 
may  be  that  in  such  case  the  rate  by  every  line  should  be  the  same  and 
that  each  line  should  sustain  whatever  disability  it  has.  If  in  this 
case  it  were  possible  to  definitely  establish  the  same  through  rate  by 
all  these  ports,  if  it  ever  had  been  possible  to  do  so,  the  advisability 
of  such  an  adjustment  would  deserve  serious  consideration.     It  is, 


IN  THE  MATTER  Op  DIFFERENTIAL  RATES  329 

however,  impossible  to  apply  that  rule  in  fact.  The  ocean  rate  from 
every  port  is  eontinually  Huetuating  and  is  seldom  the  same  for  two 
days  in  succession.  It  even  varies  from  hour  to  hour.  The  rate  may 
be  higher  from  Baltimore  to-day  and  from  New  York  to-morrow.  [67] 
It  cannot,  therefore,  be  determined  what  inland  differential  would 
produce  equal  rates  through  all  the  ports. 

It  would  be  impossible  to  make  the  same  rate  through  all  these  ports 
unless  some  system  like  that  applied  by  southern  lines  to  the  exporta- 
tion of  cotton  were  adopted.  Under  that  system  there  is  a  published 
inland  rate  to  the  several  ports,  but  that  rate  is  seldom  observed.  The 
ocean  rate  from  the  various  ports  is  ascertained.  To  this  rate  is  added 
the  published  inland  rate  from  a  given  point  to  the  various  ports  and 
the  rate  is  said  to  "make"  by  that  port  which  has  the  lowest  combina- 
tion. Any  carrier  is  no.w  at  liberty  to  apply  this  combination  through 
any  other  port,  paying  whatever  it  maj'  find  necessary  for  ocean  trans- 
portation from  that  port  and  retaining  the  balance  of  the  quoted  rate 
for  its  own  service.  In  this  way,  rates  are  in  theory  the  same  via  all 
the  ports. 

No  such  system  could  be  applied  to  this  traffic  through  the  ports  in 
question  without  dire  confusion.  Under  it  there  can  be  no  such  pub- 
lication of  the  rate  as  is  required  by  the  Act  to  Regulate  Commerce. 
There  can  be  no  maintenance  of  a  fixed  inland  rate.  The  traffic  must 
in  all  cases  be  moved  upon  a  through  bill  of  lading  and  the  destination 
must  be  known  when  the  rate  is  quoted  and  the  traffic  billed.  In  actual 
practice  grain  moves  to  the  seaboard  for  export  before  it  has  been  sold 
abroad,  and  it  was  stated  upon  this  hearing  that  the  same  was  true  of 
flour.  There  is  no  suggestion  that  such  a  system  could  or  would  be 
adopted,  and  without  it  an  equal  through  rate  is  impossible  until  ocean 
rates  are  named  and  maintained  in  the  same  way  that  inland  rail  rates 
are. 

While,  however,  it  would  be  impossible  to  secure  by  the  application 
of  any  inland  differential  the  same  rate  through  all  the  ports  it  would 
be  possible  to  say  with  confidence  that  if  this  were  the  proper  basis  of 
making  the  differential  the  present  differentials  are  too  high,  for  they 
imdoubtedly  exceed  the  difference  in  ocean  rates.  In  our  o])iniou  they 
always  have  from  the  very  first.  While  the  Thurman  Commission  re- 
ported that  rates  from  Philadelphia  and  Baltimore  were  higher  tiian 
from  New  York  by  an  amount  substantially  equaling  the  differentials, 
Mr.  Fink,  a  much  closer  observer,  with  much  better  means  of  informa- 
tion, [68]  stated  in  his  report  of  1881  that  the  difference  in  ocean  rates 
was  only  about  one-half  the  differential  from  Philadelphia,  and  some- 
thing more  than  one  cent  less  than  the  differential  from  Baltimore. 


330  ATLANTIC    PORT   DIFFERENTIALS 

This  Commission  found  upon  the  former  hearing  that  the  difference  in 
ocean  rates  did  not  equal  the  differentials.  We  have  now  expressed 
the  belief  in  our  findings  of  fact  that  for  the  last  seven  years  the  differ- 
ence in  ocean  rates  has  been  materially  less  than  the  differentials. 
During  all  this  time  the  inland  differential  has  been  in  effect  and  for 
the  last  two  or  three  years  it  has  been  strictlj^  observed.  It  must  fol- 
low, therefore,  that  the  rate  through  Baltimore  and  Philadelphia  has 
been  distinctly  lower  than  the  rate  through  New  York. 

During  all  this  time  the  ocean  rate  has  been  the  result  for  the  most 
part  of  free  competition.  Ships  from  Baltimore  have  obtained  the 
highest  rate  possible.  If  inland  differentials  were  made  the  same  now 
to  all  these  ports  what  must  happen  ?  Clearly  the  ocean  rate  must  be 
lower  from  Baltimore  and  Philadelphia  than  from  New  York,  for  thi^ 
through  rate  must  be  lower.  There  is  no  reason  to  suppose  that  an 
equal  rate  would  take  traffic  in  the  future  which  has  only  moved  on  a 
lower  rate  in  the  past.  The  real  question  is,  therefore,  whether  ships 
would  continue  to  come  to  Baltimore  and  Philadelphia  if  they  were 
obliged  to  accept  lower  rates  from  those  ports  than  obtained  from  New 
York. 

It  is  not  to  be  supposed  that  every  ship  would  leave  Baltimore  and 
Philadelphia  at  once,  nor  that  every  ship  would  ever  forsake  those 
ports.  But  vessels  are  not  like  railways ;  they  can  be  taken  to  the  best 
market.  It  fairly  appears  that  in  order  to  attract  shipping,  the  ocean 
rate  must  be  somewhat  higher  from  Baltimore  and  Philadelphia  than 
from  Boston  and  New  York.  The  reasons  for  this  have  been  stated  in 
our  findings  of  fact  and  need  not  be  repeated. 

It  has  been  said  that  equal  rates  through  all  tiie  ports  have  never 
prevailed.  To  this  the  operation  of  the  minimum  freight  agreement 
affords  a  brief  exception.  From  January  1,  1902,  until  May  26,  of  the 
same  year  rates  from  all  the  ports  to  Great  Britain  were  the  same,  so 
that  the  through  rate  was  lower  via  Baltimore  and  Philadelphia  by 
the  full  amount  of  the  differ-  [69]  ential.  On  IMay  26,  ocean  rates 
from  these  ports  were  advanced  by  the  amount  of  the  differentials,  thus 
making  the  through  rate  from  the  interior  point  to  the  foreign  port 
the  same,  and  this  continued  in  effect  for  a  few  Aveeks.  At  the  expira- 
tion of  that  time  a  readjustment  of  ocean  rates  was  made  so  that  the 
through  rates  via  Baltimore  and  Philadelphia  were  lower  than  through 
the  ports  of  New  York  and  Boston  by  about  one-half  the  differential, 
differing  somewhat  with  different  commodities.  So  far  as  this  experi- 
ence proves  anything,  it  seems  to  show  that  while  rates  were  lower 
through  Baltimore  and  Philadelphia  by  the  full  amount  of  the  differ- 
entials, traffic  was  unduly  diverted  from  Boston  and  New  York  and 


IN  THE  MATTER  OF  DIFFERENTIAL  RATES  331 

that  when  the  through  rate  was  made  the  same  via  all  the  ports  there 
was  ail  undue  diversion  to  New  York. 

In  view  of  the  fact  that  Baltimore  and  Philadelphia  have  natural 
advantages  in  location,  that  Boston  and  New  York  have  certain  natural 
advantages  in  the  way  of  ocean  facilities,  that  it  is  impossible  to  make 
and  maintain  the  same  rate  through  all  the  ports,  we  think  the  true 
inquiry  in  adjusting  this  differential  is,  what  will  equalize  the  ad- 
vantages of  transportation  through  these  various  ports.  What  part  of 
the  advantage  which  Baltimore  and  Philadelphia  enjoy  on  the  score 
of  the  inland  haul  shall  they  be  allowed  to  retain  to  compensate  them 
for  their  disadvantage  in  the  water  haul. 

The  most  important  factor  in  determining  the  route  is  undoubtedly 
the  rate.  It  was  said  in  testimony  upon  the  former  investigation  and 
has  been  repeated  in  this  that  a  difference  of  from  one-fourth  to  one- 
eighth  of  a  cent  a  bushel  will  determine  the  port  by  which  grain  shall 
be  exported.  Other  traffic  is  not  equally  sensitive,  but  it  must  follow 
with  respect  to  this  low  grade  freight  that  the  through  rate  by  all  lines 
should  be  substantially  the  same.  There  are,  however,  other  considera- 
tions. The  item  of  insurance,  quicker  and  more  reliable  service,  more 
frequent  sailings,  the  ability  to  reach  a  greater  number  of  ports,  su- 
perior banking  facilities  and  better  storage  facilities  all  influence  the 
movement  of  this  traffic  and  in  all  these  respects  New  York  is  superior 
to  its  competitors.  The  elements  which  enter  into  the  problem  are  so 
various  and  so  complex  that  it  is  mani-  [70]  festly  impossible  by  any 
a  priori  process  of  reasoning  to  determine  what  inland  differential  will 
equalize  all  these  advantages  and  disadvantages.  This  was  the  conclu- 
sion of  Mr.  Fink,  of  the  Advisory  Commission,  and  of  this  Commission 
upon  the  former  investigation.  It  is  our  conclusion  now.  The  best 
that  can  be  done  is  to  examine  the  effect  of  these  differentials.  They 
have  been  in  operation  for  almost  thirty  years.  They  have  not  been 
during  a  large  portion  of  that  time  strictly  observed,  during  some  por- 
tions of  it  probably  not  much  observed;  but  there  has  been  running 
through  the  whole  period  what  amounts  to  an  average  observance,  and 
for  the  last  two  or  three  years  they  have  been  well  maintained.  What 
does  the  result  fairly  show  ?  Does  this  competitive  traffic  move  through 
these  ports  freely  or  do  these  differentials  give  to  Baltimore  and  Phila- 
delphia a  distinct  and  unfair  advantage  over  New  York  and  Boston? 

In  the  examination  of  the  statistics  showing  this  movement,  certain 
things  should  be  kept  in  mind. 

The  total  amount  exported  through  these  ports  must  decrease  as 
compared  with  the  total  exports  of  the  whole  country.  A  glance  at 
the  map  of  the  United  States  will  show  that  the  points  at  which  these 


332  ATLANTIC    PORT    DIFFERENTIALS 

exports  originate  are  much  nearer  the  Gulf  than  the  Atlantic  ports. 
In  the  early  days  of  this  business  the  South  was  prostrate  from  the  ef- 
fects of  the  Civil  War.  It  had  no  railroads  worth  the  name.  To-day 
many  lines  of  railway  connect  the  grain  fields  and  packing  houses  of 
the  West  with  Galveston  and  New  Orleans  and  the  gradients  and  cost 
of  operation  upon  those  lines  are  such  that  traffic  can  be  transported 
almost  as  cheaply  per  mile  as  to  the  Atlantic  seaboard.  These  rail- 
roads are  bound  to  carry  a  large  part  of  this  traffic  to  the  Gulf.  An 
examination  of  Table  No.  3  shows  the  extent  to  which  our  grain  and 
flour  exports  are  being  diverted  from  the  Atlantic  seaboard  to  the  Gulf 
ports.  Again  within  a  comparatively  few  years  Norfolk  and  Newport 
News  have  become  important  ports  of  export.  Strong  lines  of  railway 
have  reached  deep  water  at  these  points,  have  provided  extensive  fa- 
cilities for  the  handling  of  this  business,  and  will  certainly  insist  upon 
a  portion  of  it. 

The  history  of  the  Erie  Canal  has  an  important  bearing  upon  this 
question.  In  the  early  days  of  the  export  grain  movement  [71]  the 
Great  Lakes  and  the  Erie  Canal  formed  the  cheapest  avenue  of  trans- 
portation to  the  seaboard.  At  one  time  more  than  half  the  grain 
which  reached  the  city  of  New  York  came  by  canal.  It  was  that  which 
gave  New  York  its  prominence  as  a  grain  exporting  port.  To-day  the 
canal  has  almost  ceased  to  be  a  factor  in  this  situation  and  the  effect  of 
this  upon  the  exports  of  that  port  must  not  be  overlooked.  As  we  sug- 
gested in  the  former  case,  New  York  has  no  vested  right  to  the  handling 
of  this  grain.  The  railroads  which  serve  New  York  can  no  more  claim 
to  carry  the  grain  which  formerly  went  by  canal  than  those  leading  to 
Philadelphia  and  Baltimore.  With  the  dropping  out  of  the  canal  there 
disappeared  a  factor  which  made  powerfully  for  the  port  of  New  York. 
When  the  improvements  to  the  Erie  Canal  which  are  contemplated  are 
completed  so  that  that  water-way  becomes  once  more  an  actual  carrier 
of  traffic,  the  effect  will  undoubtedly  be  to  greatly  increase  the  exports 
of  grain  and  flour  from  that  port  in  comparison  with  the  other  three 
ports  involved  in  this  hearing. 

No  comparison  by  single  years  is  of  much  value.  The  causes  which 
operate  to  induce  a  considerable  movement  of  grain  through  one  port 
and  not  through  another  are  so  various  that  no  inference  can  be 
safely  drawn  from  the  history  of  a  single  season.  The  failure  of  a 
crop  in  a  particular  locality ;  the  presence  of  large  quantities  of  other 
freight  at  a  particular  port  may  have  this  effect.  The  last  year  upon 
which  we  had  the  statistics  on  the  former  hearing  was  1896.  New  York 
stood  aghast  at  the  falling  off  in  its  exports  of  grain  for  that  season. 
The  differential  continued  the  same  through  1897  and  1898,  and  yet  we 


IN  THE  MATTER  OP  DIFFERENTIAL  RATES  333 

find  that  the  percentage  of  New  York  had  returned  by  tlie  latter  year 
to  substantially  its  normal  figure.  Counsel  for  New  York  stated  that 
the  etfect  of  the  ex-lake  differential  was  especially  noticeable  and  yet 
it  will  be  seen  upon  referring  to  Table  No.  9  that  in  1897  when  the 
differential  of  one  cent  a  bushel  established  by  the  Joint  Traffic  Asso- 
ciation was  in  effect,  Philadelphia  obtained  but  11  per  cent,  of  the  ex- 
lake  grain,  being  the  smallest  with  the  exception  of  1895  for  the  twelve 
years  given  in  that  Table. 

An  examination  of  these  statistics  seems  to  show  that,  beginning 
with  the  year  1878,  the  first  full  year  after  these  differ-  [72]  entials 
had  been  established  by  the  agreement  of  1877,  and  coming  down  to 
the  year  1894,  New  York  has  sensibly  declined  in  comparison  with  the 
four  ports  considered  as  a  whole,  and  that  each  of  the  other  three  ports 
has  somewhat  increased  in  comparison  with  New  York.     Boston  at 
first  gained,  but  for  the  last  eight  years  has  lost ;   Philadelphia  at  first 
lost  and  latterly  has  gained;    Baltimore  has  fluctuated  at  different 
times,  but  on  the  whole  is  a  substantial  gainer.     The  decline  of  New 
York  is,  however,  largely  associated  with  the  falling  off  in  its  canal 
traffic;    thus,  in  the  year  1878  the  total  number  of  bushels  of  wheat, 
corn,  and  flour,  in  bushels,  exported  through  New  York,  Boston,  Phila- 
delphia, Baltimore,  Norfolk,  and  Newport  News  was,  according  to  a 
table  quoted  in  the  brief  of  New  York,  175,000,000,  in  round  numbers. 
Of  this  New  York  exported  54.1  per  cent.;    Boston,  6.8  per  cent.; 
Philadelphia,  16.7  per  cent. ;    Baltimore,  22.3  per  cent. ;    Norfolk  and 
Newport  News,  nothing.     In  the  year  1903  the  exports  through  thi^ 
same  ports  were  135,000,000  bushels;  of  which  New  York  had  37.5  per 
cent. ;   Boston,  9.6  per  cent. ;   Philadelphia,  17.4  per  cent. ;    Baltimore, 
28.1  per  cent.;  Norfolk.  1.1  per  cent.,  and  Newport  News,  6.3  per  cent. 
In  1878  the  canal  brought  to  New  York  64,000,000  bushels,  while  in 
1903  it  brought  only  13,000,000  bushels.     New  York  is  still  well  in  ad- 
vance of  any  other  one  port.     In  the  year  1903  it  exported  44.4  per 
cent,  of  the  grain,  38.2  per  cent,  of  the  flour,  and  62.7  per  cent,  of  the 
provisions  passing  out  through  the  four  ports.     It  should  be  remem- 
bered that  the  effect  of  these  differentials  is  confined  to  low-grade 
traffic ;   practically  all  of  the  higher  classes  of  freight  still  moves  ou1 
through  New  York.     It  was  said  with  truth  upon  the  argument  that 
the  value  of  the  exports  and  imports  passing  through  a  particular  port 
has  little  weight  as  showing  the  amount  of  the  traffic ;   yet  it  is  some- 
what significant  that  of  all  exports  passing  out  through  these  four 
l)orts  in  1893,  New  York  exported  in  value  67  per  cent.,  and  that  of 
the  imports  flowing  in  through  these  four  ports  New  York  had  in  value, 
that  same  year,  78  per  cent. ;  of  the  whole  United  States,  60.3  per  cent. 
It  can  hardlv  be  said  that  there  is  any  such  marked  diversion  of  traffic 


334  ATLANTIC    PORT   DIFFERENTIALS 

from  the  port  of  New  [73]  York  as  would  warrant  the  interference  of 
Govornniont  to  prevent  it. 

AVliile  holding  in  the  former  case  that  there  was  no  such  arbitrary 
interference  with  the  movement  of  this  traffic  upon  the  part  of  the 
carriers  as  would  constitute  a  violation  of  the  Act  to  Eegulate  Com- 
merce, the  Commission  did  feel  that  the  differentials  upon  grain  were 
probably  too  large.  This  mainly  arose  from  the  fact  that  from  various 
causes  set  forth  in  that  report  a  differential  of  three  cents  was  nuich 
more  potential  in  sending  traffic  through  the  port  of  Baltimore  in  1897 
than  it  had  been  in  1877  or  in  1882,  Had  we  been  acting  in  that  case 
in  the  capacity  of  an  Advisory  Commission,  we  should  probably  have 
recommended  the  reduction  of  those  differentials.  They  were  in  fact 
reduced  one-half  by  the  voluntary  action  of  the  carriers  in  1899,  and 
we  are  satisfied  that  the  differentials  of  one  cent  and  one  and  one-half 
cents,  which  were  then  established  and  which  are  still  in  effect,  are 
sufficiently  large.  We  feel  now  that  perhaps  the  differentials  on  flour 
should  be  somewhat  modified.  That  commodity  moves  to  the  seaboard 
under  substantially  the  same  conditions  and  at  practically  the  same 
cost  as  grain;  but  is  probably  somewhat  less  influenced  by  the  ocean 
rate  than  grain.  About  the  only  thing  which  is  made  reasonably  cer- 
tain by  the  statistical  tables  offered  in  evidence  is  that  Boston  has  dis- 
tinctly lost  and  that  Baltimore  and  especially  Philadelphia  have  dis- 
tinctly gained  in  exports  of  flour.  We  are  inclined  to  think  that  this 
differential  should  be  made  two  cents  at  Baltimore  and  one  cent  at 
Philadelphia.  We  have  no  knowledge  whatever  as  to  the  movement 
of  iron  and  steel  articles,  in  case  of  which  these  differentials  were  re- 
duced in  1904,  and  can,  therefore,  express  no  opinion  as  to  their  pro- 
priety. 

Boston  insists  that  if  Philadelphia  and  Baltimore  are  entitled  to  a 
differential  against  New  York  it  is,  for  the  same  reasons,  entitled  to 
some  consideration.  We  found  on  the  former  hearing  that  ocean  rates 
from  Boston  had  been  lower  than  from  New  York,  and  since  the  inland 
rate  has  always  been  the  same,  this  must  indicate  that  the  total  through 
rate  by  the  port  of  Boston,  as  well  as  by  Baltimore  and  Philadelphia, 
must  be  lower  than  through  New^  York.  It  appears  from  the  evidence 
in  this  case  [74]  that  at  the  present  time  ocean  rates  are  substantially 
the  same  from  both  these  ports.  It  is,  therefore,  possible  that  in  the 
future  it  may  become  evident  that  Boston  cannot  fairly  compete  for 
this  traffic  upon  the  present  basis ;  but  we  do  not  feel  that  the  record 
before  us  would  justify  that  inference  to-day.  We  desire  to  call  espe- 
cial attention  to  the  fact  that  these  differentials  have  not  been  fully 


IN  THE  MATTER  Op  DIFFERENTIAL  RATES  335 

observed  for  a  sufficient  length  of  time  to  indicate  exactly  what  their 
effect  maj'  be  when  strictly  maintained  through  a  series  of  years. 

The  immediate  cause  of  this  investigation  was  the  controversy  over 
the  differential  on  ex-lake  grain.  That  question  was  incidentally  re- 
ferred to  in  the  former  case,  but  not  much  considered.  It  was  there 
said  that  this  grain  originated  at  the  same  point,  whether  it  reached  the 
port  of  export  by  the  all-rail  or  the  lake-and-rail  route,  and  that  since 
the  purpose  of  the  differential  was  to  distribute  the  traffic  between  the 
different  ports,  the  same  reason  which  justified  a  differential  in  one  case 
would  apply  in  the  other.  It  would  follow  from  this  reasoning,  that 
the  differential  in  both  cases  ought  to  be  the  same. 

Further  reflection  leads  to  the  conclusion  that  the  position  taken  in 
that  opinion  is  not  altogether  tenable.  The  origin  of  the  grain  is  the 
same  in  both  cases  and  the  traffic  is  therefore  strictly  competitive.  It 
should  not  be  regarded  as  originating  at  Buffalo  since  it  is  only  there 
temporarily  in  transit ;  but  there  is  another  feature  of  the  case  which 
deserves  attention. 

Distance  is  important  as  already  observed  only  in  so  far  as  it  affords 
a  measure  of  the  cost  of  transportation.  One  point  may  be  nearer 
another  in  miles,  but  more  distant  in  cost  of  carriage.  Now,  the  cheap- 
est route  by  which  this  grain  can  reach  the  seaboard  from  its  point  of 
origin  in  many  cases  is  by  rail  to  Chicago,  by  water  from  Chicago  to 
Buffalo  and  by  rail  from  Buffalo  to  the  port  of  export ;  and  this  is  so 
if  we  entirely  disregard  the  Erie  Canal.  It  is  a  natural  advantage  of 
the  port  of  New  York  to  be  located  on  this  route.  By  this  route  the 
distance  to  New  York,  in  cost  of  transportation,  is  no  greater  than  to 
Philadelphia  and  Baltimore.  When  this  grain  arrives  at  Buffalo  there 
is,  therefore,  no  reason  growing  out  of  the  greater  proximity  of  [75] 
Baltimore  or  Philadelphia  to  the  grain  fields  which  justifies  or  requires 
a  lower  rate  to  those  ports.  It  has  been  seen,  however,  that  the  pur- 
pose of  the  differential  is  to  distribute  this  competitive  traffic  between 
the  different  ports.  It  has  also  been  seen  that  the  ocean  rate  through 
Baltimore  and  Philadelphia  is  somewhat  higher,  except  on  cargo  busi- 
ness, of  which  none  is  now  done,  than  through  the  ports  of  New  York 
and  Boston.  If  this  grain  reaches  the  seaboard  by  the  all -rail  route, 
the  advantage  of  Baltimore  is  taken  away  in  favor  of  New  York  and 
Boston  to  the  extent  of  one  and  one-half  cents  per  hundred  pounds, 
and  we  think  that  when  the  same  grain  arrives  at  Buffalo  it  is  proper 
for  the  same  reason  to  take  away  something  from  the  ocean  advantage 
of  New  York  in  favor  of  Baltimore. 

This  ex-lake  grain  may  move  through  either  Pairport,  Erie,  or  Buf- 
falo.    Fairport  and  Erie  are  in  differential  territory,  so  that  rates 


336  ATLANTIC   PORT   DIFFERENTIALS 

from  these  two  points  would  be,  upon  the  ordinary  basis,  lower  to 
Philadelphia  and  Baltimore  than  to  New  York.  But  it  was  said  in 
testimony  that  with  respect  to  this  ex-lake  grain  these  three  lake  ports 
should  be  treated  alike;  and  such  is  our  opinion.  To  apply  a  lower 
rate  to  Fairport  and  Erie  would  be  unjust  to  Buffalo.  There  is  now 
in  effect,  pending  the  disposition  of  this  matter  by  the  Commission, 
a  differential  on  this  traffic  of  four-tenths  of  one  cent  per  bushel  in 
favor  of  Baltimore.  We  are  inclined  to  think  that  this  should  be  modi- 
fied a  little  and  as  modified  extended  to  Philadelphia,  and  we  believe 
that  if  this  is  done  the  differential  so  enjoyed  by  those  two  ports  upon 
this  traffic  will  certainly  not  exceed  the  average  for  the  last  fifteen 
years. 

It  may  be  asked  with  some  reason  why  a  distinction  should  be  made 
in  the  amount  of  this  differential  between  this  ex-lake  traffic  and  that 
which  reaches  these  ports  by  the  all-rail  routes.  Our  answer  is :  These 
four  cities  are  all  seaports.  This  is  a  fundamental  advantage  of  loca- 
tion which  entitles  each  and  every  one  of  them  to  participate  in  this 
export  business  and  the  public  interest  requires  that  this  right  shall 
be  recognized.  But  each  has  certain  subsidiary  advantages  peculiar 
to  itself  which  should  be  preserved  in  so  far  as  is  compatible  with  free 
competition.  It  may  well  be,  therefore,  that  Baltimore  should  be  given 
a  some-  [76]  what  more  favorable  rate  on  all-rail  than  on  rail-and- 
water  traffic,  for  it  possesses  an  advantage  in  the  former  case  which  it 
has  not  in  the  latter. 

New  York  insists  that  the  effect  of  these  differentials  is  to  force 
traffic  out  of  natural  channels  into  unnatural  and  more  expensive 
routes,  and  that  the  final  effect  is  to  impose  an  enormous  burden  upon 
the  public.  With  respect  to  all-rail  traffic  this  premise  of  fact  is  not 
well  taken.  The  actual  cost  of  delivering  grain  into  the  hold  of  the 
ship  from  the  average  point  of  origin  is  probably  three  cents  per  hun- 
dred pounds  less  at  Baltimore  than  at  New  York.  The  cost  of  the 
ocean  transportation  from  Baltimore  may  be  somewhat  greater  al- 
though New  York  and  Boston  have  strenuously  affirmed  the  contrary. 
Hence  traffic  which  passes  through  New  York  and  Boston  under  the 
operation  of  these  differentials  is  forced  into  a  more  expensive  route 
than  as  though  it  passed  out  through  Baltimore. 

With  respect  to  this  ex-lake  grain,  the  assumption  of  New  York  may 
be  correct,  but  we  do  not  think  this  consideration  should  be  controlling. 
To  decree  that  traffic  should  always  move  by  the  cheapest  route  would 
be  to  entirely  eliminate  competition,  which,  within  reasonable  bounds, 
is  for  the  interest  of  the  general  public. 

It  was  also  strongly  urged  upon  the  Commission  by  the  representa- 


I 


IN  THE  MATTER  OP  DIFFERENTIAL  RATES  387 

tives  of  New  York  and  Boston  that  the  desire  of  the  lines  serving  those 
ports  was  to  eliminate  the  present  differentials  by  a  reduction  in  the 
export  rate  to  those  ports,  and  it  was  said  that  this  must,  in  the  nature 
of  things  be  a  permanent  reduction  and  that,  therefore,  it  would  result 
in  a  substantial  saving  to  the  public. 

It  seems  probable  that  if  the  differentials  were  to  be  wiped  out  at 
the  present  time  this  would  be  done  by  applying  at  Boston,  New  York, 
and  Philadelphia,  upon  export  traffic,  the  domestic  rate  to  Baltimore. 
It  is  also  true  that  this  export  rate  could  not  be  advanced  without  ad- 
vancing the  Baltimore  domestic  rate,  since  it  would  be  impossible  to 
maintain  at  that  port  a  higher  rate  on  export  than  on  domestic  Inisi- 
ness.  But  what  possible  guaranty  is  there  that  the  domestic  rate  at 
Baltimore  would  not  be  advanced?  In  1902  domestic  rates  to  all  these 
ports  were  [77]  raised,  and  although  this  Commission  found  that  the 
advance  was  unjustifiable  it  has  been  kept  in  effect  except  during  the 
season  of  lake  navigation.  The  present  export  rate  is  four  cents  lower 
than  the  domestic  rate  at  New  York.  If  that  domestic  rate  is  too  high 
it  ought  to  be  reduced,  but  we  do  not  think  it  would  be  just  to  the  com- 
munities affected  nor  to  the  lines  serving  those  communities,  nor  that 
in  the  end  it  would  benefit  the  general  public  to  deprive  the  ports  of 
Philadelphia  and  Baltimore  of  the  ability  to  compete  for  this  traffic. 

We  have  not  considered  westbound  differentials  applicable  to  import 
traffic  since  there  are  no  facts  in  this  record  upon  which  to  base  an 
opinion.  With  respect  to  export  differentials  we  conclude :  that  the 
differential  on  flour  both  all-rail  and  lake-and-rail  should  be  2  cents 
per  hundred  pounds  at  Baltimore  and  1  cent  per  hundred  pounds  at 
Philadelphia ;  that  there  should  be  allowed  both  Baltimore  and  Phila- 
delphia a  differential  of  ^^o  of  1  cent  per  bushel  on  ex-lake  grain; 
that  otherwise  the  present  differentials  should  remain  in  force.  This 
is  not  a  proceeding  in  which  the  Commission  could  make  an  order,  nor 
do  we  intend  to  intimate  that  the  facts  appearing  would  justify  an 
order  in  any  proceeding.  Our  impression  is  that  the  above  modifica- 
tions would  be  fair  to  the  various  communities  and  lines  of  railway 
interested,  and  that  it  is  in  the  public  interest  that  these  differentials 
should  be  so  adjusted  that  all  the  ports  and  the  various  lines  serving 
them  may  fairly  compete  for  this  traffic. 

Clements,  Commissioner,  dissenting : 

I  cannot  join  in  the  suggestions  of  the  majority,  which  are  in  effect 
recommendations  for  the  avowed  purpose  of  the  fixing  of  differentials 
in  freight  rates  on  export  traffic  rnoving  through  the  respective  port:^ 
22 


338  ATLANTIC   PORT   DIFFERENTIALS 

in  question  and  between  the  competing  railroads  leading  thereto.  It 
is  said  in  the  report,  "it  has  been  seen,  however,  that  the  purpose  of 
the  differential  is  to  distribute  this  competitive  traffic  between  the  dif- 
ferent ports ; ' '  also  ' '  the  real  question  is,  on  what  basis  shall  rates  be 
equalized  through  the  various  ports."  Again  it  is  said,  "when  the 
Commission  examined  this  subject  in  the  Produce  Exchange  case  *  *  * 
its  only  function  was  to  determine  whether  the  Act  to  Regulate  [78] 
Commerce  had  been  violated.  Our  relation  to  the  subject  to-day  is  a 
broader  one,  certainly  if  we  comply  with  the  request  of  the  petitioners 
at  whose  instigation  this  proceeding  was  instituted.  We  are  to  saj', 
not  whether  these  differentials  are  lawful  merely,  but  whether  on  the 
whole,  considering  the  interests  of  all  parties,  they  are  fair." 

If  this  were  a  proceeding  against  a  carrier  reaching  by  its  lines  all 
of  the  ports  in  question  it  would  be  within  the  jurisdiction  of  the  Com- 
mission to  deal  with  the  differences  in  rates  as  discriminations  between 
localities  by  such  carrier  and,  if  found  undue,  to  condemn  them.  In 
the  case  of  Kemble  v.  The  Lake  Shore  &  Michigan  Southern  Railway 
Company  {ante,  p.  231),  referred  to  in  the  report,  the  complaint  was 
against  carriers  making  a  through  line  both  to  Boston  and  to  New 
York,  so  that  the  question  presented  was  that  of  discrimination  by  the 
same  line  as  between  the  two  places,  both  being  served  by  it.  But 
there  is  a  manifest  and  radical  difference  between  a  matter  of  discrimi- 
nation like  that  by  a  carrier  between  places  on  its  line,  and  which  is 
clearly  covered  by  the  provisions  of  the  third  section  of  the  Act  to 
Regulate  Commerce  and  the  fixing  of  differentials  in  rates  to  or  through 
the  various  ports  and  over  independent  and  competing  railroads.  In 
the  latter  case  the  law  has  undertaken  to  leave  the  free  play  of  com- 
petition to  adjust  rates,  subject  only  to  the  requirements  made  of  each 
carrier  that  its  rates  shall  be  reasonable  and  just  and  shall  not  unduly 
discriminate  between  commodities  or  between  persons  and  localities 
reached  or  served  by  it  and  that  duly  established  and  published  rates 
be  observed.  The  foregoing  report  proceeds  upon  the  idea  that  there 
is  some  legitimate  and  ascertainable  standard  of  fairness  by  which 
there  can  be  fixed  a  limited  and  proper  degree  of  competition  and 
measure  of  distribution  of  the  traffic  between  the  ports  and  carriers 
other  than  that  wrought  by  competition.  The  law  undertakes  to  fix  no 
such  standard  or  limitation ;  nor  does  it  authorize  the  Commission  to 
do  so  even  for  the  purpose  of  putting  to  rest  these  questions  so  long 
and  so  often  involved  in  competitive  contests  between  carriers.  The 
futility  of  the  undertaking  of  the  Commission  to  do  so  is  illustrated  in 
the  following  admission  contained  in  its  conclusions : 


IN  THE  MATTER  OP  DIFFERENTIAL  RATES  339 

[79]  "We  have  endeavored  to  find  some  fundamental  principle  by 
the  application  of  which  this  dispute  might  be  laid  at  rest,  but  entirely 
Avithout  success.  It  is  said  that  a  fair  differential  is  one  which  would 
give  to  these  several  ports  the  traffic  to  which  they  are  entitled.  It  is 
also  said  that  these  several  ports  are  entitled  to  what  of  this  traffic  they 
can  obain  under  a  fair  differential." 

The  findings  declare,  "there  is  no  testimony  in  this  record  whicli 
attempts  to  show  the  relative  cost  of  handling  this  traffic,"  yet  the 
Ciuestion  of  a  differential  in  rates  is  intimately  connected  with  the  ques- 
tion of  the  reasonableness  of  the  rates  involved,  and  cost  of  service  is 
one  factor  of  too  much  importance  in  connection  therewith  to  be  ig- 
nored. It  is  not  enough  to  say  that  equalizing  the  export  rates  is  but 
taking  into  account  the  carriage  from  origin  to  destination  and  taking 
from  the  inland  rate  as  compensation  the  post-terminal  charges  from 
the  out-ports,  for  on  this  point  the  findings  are  no  more  satisfactory. 
They  say,  "it  is  therefore  impossible  to  find  with  any  degree  of  con- 
fidence what  the  rates  from  these  ports  have  been."  The  higher  in- 
surance rates  to  be  compensated  are  quite  as  elusive.  These  it  is  said 
"would  be  in  the  long  run  a  real  disadvantage  against  these  ports,  but 
there  is  no  testimony  in  this  case  from  which  we  can  place  any  exact 
figure  upon  this  disadvantage,"  but  the  differentials  are  to  be  fixed 
to  the  fraction  of  a  cent.  The  futility  of  the  undertaking  is  further 
illustrated  in  the  following  declaration  found  in  the  opinion : 

"There  is  no  just  principle  which  would  compel  this  company  against 
its  will  to  apply  at  New  York  the  same  rate  as  at  Philadelphia,  when 
the  cost  of  rendering  that  service  is  distinctly  greater.  It  might,  as 
a  matter  of  competition,  see  fit  to  do  so,  but  it  could  not  in  justice  be 
compelled  to."  It  is  further  said  :  "If,  again,  it  can  be  properly  done 
these  rates  should  be  so  adjusted  that  this  competitive  traffic  will  be 
fairly  distributed  between  the  different  lines  of  railway  which  serve 
these  ports. ' ' 

Thus  it  is  seen  the  purpose  and  effect  of  the  conclusions  is  to  declare 
what  differences  in  rates  the  railroads  should  make  to  the  four  ports 
for  the  purpose  of  distributing  the  business.  Whether  the  carriers  see 
fit  to  follow  the  suggestions  of  the  Com-  [80]  mission,  which  they  are, 
of  course,  in  no  sense  bound  to  do,  or  decline  to  accede  to  the  same  will, 
in  my  opinion,  leave  the  Commission  in  an  embarrassing  attitude.  If 
they  refuse  we  are  powerless  to  enforce  the  recommendations,  yet  com- 
promised in  any  subsequent  proceeding  against  finding  other  as  rea- 
sonable rates.  If  they  acquiesce  we  will  have  gone  beyond  our  au- 
thority to  interfere  in  the  course  of  trade,  determining  the  direction 
and  destination  of  commerce,  a  matter  with  which  we  are  not  charged. 


340  ATLANTIC    PORT   DIFFERENTIALS 

To-morrow  we  may  be  called  upon  to  determine  what  share  the  Gulf 
ports  may  have,  and  the  Gulf  roads  may  carry ;  the  next  day  to  fix  the 
proportion  to  which  the  Pacific  cost  is  entitled. 

While  the  situation  justified  the  inquiry,  the  facts  disclosed  do  not, 
in  my  judgment,  justify  the  conclusions  reached  for  the  reason  that  I 
believe  they  do  violence  to  the  great  principle  of  competition  which 
the  Congress  and  the  Supreme  Court  have  so  jealously  and  consistently 
nourished  as  one  of  the  fundamental  rights  of  the  public.  In  declar- 
ing as  between  competing  lines  and  competing  ports  what  differentials 
shall  govern,  assuming  that  they  will  govern,  we  hamper  competition, 
and  by  this  regulation  of  distribution  effect  in  reality  a  division  of 
territory,  a  division  of  traffic  and  a  division  of  earnings,  which  in  sub- 
stance and  effect  tend  to  defeat  not  only  the  purposes  of  the  anti- 
trust act  against  the  restraint  of  trade,  but  the  pooling  provision  of  the 
Interstate  Commerce  Act,  Avith  the  enforcement  of  which  the  Commis- 
sion is  charged. 

In  this  thirty  years'  contest  over  the  traffic  under  consideration 
there  have  been  truces  and  arbitrations  before  this;  but  when  i\Ir. 
Fink  was  chosen  it  was  by  the  carriers,  and  when  Judge  Cooley  and 
his  associates,  the  Advisory  Commission,  were  called  in  1882,  it  was  by 
the  carriers.  When  Judge  Cooley  was  called  in  1886  on  western  dif- 
ferentials it  was  by  the  carriers.  And  these  arbitrators  did  what? 
They  left,  as  they  were  doubtless  expected  and  as  they  were  bound  to 
do,  conditions  as  they  found  them.  The  carriers  b}'  competition  and 
every  device  in  economy  human  ingenuity  could  invent  had  reached 
in  these  years  of  struggle,  competition  and  the  natural  course  of  trade, 
results  which  were  not  satisfactory  to  all  of  the  communities  and  [81] 
to  shippers,  and  to  satisfy  these,  disinterested  non-carriers  were  called 
in  to  give  a  lay  opinion  and  pleading  lack  of  information  and  sub- 
stantial justice  they  approved  what  they  found  and  the  differentials 
were  accordingly  left  undisturbed  while  the  truce  lasted. 

May  competing  carriers  lawfully  effect  through  the  agency  of  the 
Commission  restraint  of  competition  and  trade  by  a  division  of  traffic 
between  themselves  and  the  ports  when  to  do  the  same  thing  through 
an  agency  of  their  own  would  be  unlaAvful?     I  think  not. 

The  expectation  of  putting  these  questions  to  ultimate  rest  could 
spring  only  from  a  Utopian  dream.  Their  permanent  rest  is  perhaps 
neither  practicable  in  view  of  the  interests  of  the  ports  and  carriers 
nor  desirable  in  the  interest  of  tlie  public. 

The  unmolested  freedom  of  competition  by  lawful  methods  permit- 
ting the  free  course  of  traffic  is  more  likely  to  give  to  each  community 
and  carrier  the  fair  and  just  rewards  of  its  enterprise  and  public  spirit 


IN  THE  MATTER  OP  DIFFERENTIAL  RATES  341 

and  just  rates  to  the  public  than  any  devised  plan  of  fixed  differentials 
between  competing  carriers  to  compose  conflicting  interests  by  appor- 
tionment of  the  traffic  and  which  in  the  nature  of  the  case  must  be  more 
or  less  arbitrary.  It  is  at  least  safe  to  keep  within  both  the  spirit  and 
letter  of  the  law. 


MEMORANDUM, 


Filed  June  23,  1905. 

Prouty,  Commissioner: 

Soon  after  the  promulgation  of  the  opinion  of  the  Commission  in  the 
above  investigation  a  communication  was  received  from  the  Boston 
Chamber  of  Commerce  calling  attention  to  the  fact  that  the  application 
of  a  uniform  differential  of  three-tenths  of  a  cent  per  bushel  upon  all 
kinds  of  ex-lake  grain  would  result  in  allowing  almost  twice  as  great  a 
differential  per  hundred  pounds  upon  oats  as  upon  wheat.  It  was 
also  stated  that  whenever  in  the  past  differentials  had  been  agreed  upon 
by  the  carriers,  they  had  been  onl}'  about  one-half  as  much  per  bushel 
upon  oats  as  upon  wheat  and  corn. 

Upon  receiving  this  communication  we  addressed  to  the  different 
parties  in  interest  a  circular  asking,  first,  whether  the  statements  of 
the  Boston  Chamber  of  Commerce  in  reference  to  the  amount  of  the 
differentials  in  the  past  were  correct,  and,  second,  whether  a  differ- 
ential by  the  hundred  pounds  could  be  applied  to  this  ex-lake  traffic. 

Replies  from  the  various  parties  in  interest  have  just  been  received. 
Baltimore  states  that  the  differentials  given  are  not  correct.  Phila- 
delphia admits  that  in  the  past  the  differential  by  the  bushel  has  been 
at  times  lower  upon  oats  than  upon  wheat  and  corn,  but  does  not  admit 
the  correctness  of  those  given,  and  states  that  the  differential  of  four- 
tenths  of  one  cent  per  bushel  applied  to  all  grains. 

An  examination  of  the  record  fails  to  disclose  any  evidence  tending 
to  show  what  differential  has  been  applied  to  ex-lake  oats.  No  allu- 
sion to  this  subject  is  found  in  any  of  the  briefs  which  were  submitted, 
nor  was  it  referred  to  upon  the  oral  argument.  Upon  having  our  at- 
tention called  to  the  matter  it  seems  proper  to  state : 

The  Commission  intended  to  recommend  a  differential  upon  this  ex- 
lake  traffic  of  approximatel}^  one-half  a  cent  per  hundred  pounds.  In- 
asmuch as  the  rates  were  uniformly  named  in  cents  per  bushel,  and 
inasmuch  as  the  differentials  in  the  past  had  usually,  if  not  unifoi'mlj'-, 
been  expressed  in  the  same  way,  we  inferred  that  the  differentials  found 
by  us  had  better  be  so  stated.     In  considering  the  equivalent  of  one- 


342  ATLANTIC    PORT    DIFFERENTIALS 

half  cent  per  hundred  pounds  by  the  bushel,  we  had  in  mind  wheat 
and  corn,  and  overlooked  the  great  difference  in  weight  between  those 
grains  and  oats. 

The  answers  to  our  circular,  together  with  what  information  we  have, 
rather  indicate  that  as  a  practical  matter  these  ex-lake  differentials 
should  be  named  in  bushels ;  and,  it  is  also  our  opinion  that  the  differ- 
ential upon  the  heavier  grains  should  be  somewhat  greater  than  that 
upon  oats  and  barley.  Since  it  is  hardly  practicable  to  state  in  case  of 
the  different  grains  the  exact  differential  per  bushel  which  would  be 
equivalent  to  one-half  a  cent  per  hundred  pounds,  we  think  that  the 
differential  on  wheat,  corn,  and  rye  should  be  three-tenths  of  a  cent 
per  bushel,  while  that  upon  oats  and  barley  should  be  one-sixth  of  a 
cent  per  bushel.  It  may  savor  somewhat  of  de  minimis  to  distinguish 
between  a  differential  of  three-tenths  of  a  cent  and  one-sixth  of  a  cent 
per  bushel,  but  it  must  be  remembered  that  upon  the  testimony  in  this 
case  one-eighth  of  a  cent  per  bushel  often  determines  the  route  which 
this  traffic  shall  take ;  while,  as  appears  from  Table  8  in  the  original 
report,  the  quantity  of  ex -lake  oats  and  barley  is  very  considerable  in 
volume. 


SAGINAW  BOARD  OF  TRADE,  ET  AL., 

V. 

GRAND  TRUNK  RAILWAY  COMPANY,  ET  AL. 

17  I.  C.  C.  128. 


343 


SAGINAW  BOARD  OF  TRADE,  ET  AL., 

V. 

GRAND  TRUNK  RAILWAY  COMPANY,  ET  AL. 

Decided  June  8,  1909. 
(17  1.  C.  C.  128.) 

1.  The  percentage  of  the  Chicago  rates,  adopted  by  defendants  as  a  basis  for 
fixing  the  rates  from  Atlantic  coast  territory  to  Saginaw,  Flint,  and  other 
points  in  the  Saginaw  Valley,  is  not  found,  under  the  circumstances  of  the 
case,  to  be  too  high,  when  compared  with  the  percentages  that  fix  the  rates 
enjoyed  by  other  groups  in  adjacent  territory. 

2.  The  proximity  of  Detroit  and  Toledo  to  the  great  channels  of  through  transpor- 
tation and  their  location  on  direct  through  routes  where  the  density  of  traffic 
is  very  great  and  the  general  operating  and  traffic  conditions  are  favorable,  are 
elements  that  cannot  be  ignored  by  the  rate  maker  and  must  necessarily  tend 
to  lower  rates  than  can  be  accorded  to  communities  that  are  removed  from 
these  great  streams  of  traffic. 

3.  The  general  foundation  upon  which  rests  the  whole  structure  of  eastbound  and 
westbound  rates  in  the  "percentage-basis"  territory  described  and  discussed. 

John  B.  Daish  and  Frank  F.  Kleinfeld  for  complainants. 

G.  W.  Kretzinger  for  Grand  Trunk  Railway  Company  and  Central 
Vermont  Railway  Company. 

0.  E.  Butterfield  for  Michigan  Central  Railroad  Company;  Boston 
&  Albany  Railroad  Company ;  Cleveland,  Cincinnati,  Chicago  &  St. 
Lonis  Railway  Company;  Lake  Shore  &  Michigan  Southern  Railway 
Company ;  New  York  Central  &  Hudson  River  Railroad  Company,  and 
West  Shore  Railroad  Company. 

James  H.  Campbell  for  Pennsylvania  Company  and  Pennsylvania 
Railroad  Company. 

Charles  M.  McPherson  for  Pere  Marquette  Railroad  Company. 

Note: — The  importance  of  this  report  lies  in  the  description  of  the  method  of 
fixing  the  relation  of  rates  between  points  in  Central  Freight  Association  Territory 
from  and  to  which,  the  Atlantic  Seaboard  cities  considered,  differential  rates  apply. 
The  method  herein  described  was  adopted  in  the  same  year  as  the  Differential 
Agreement  (ante,  p.  1)  was  made. 

In  a  letter  to  the  author,  Mr.  C.  S.  Wight,  General  Freight  Eepresentative  of  the 
Baltimore  &  Ohio  Railroad  Company,  who  was  in  railway  service  at  the  time  of  tiie 
adoption  of  the  differentials,  states: 

' '  When  the  present  eastbound  differentials  of  3  cents  per  100  pounds  in  favor  of 
Baltimore  and  2  cents  per  100  pounds  in  favor  of  Philadelphia,  as  against  the  Port 
of  New  York,  was  first  established,  it  was  a  compromise  basis,  for  the  reason  that 
all  eastbound  rates  to  New  York  were  based  upon  the  McGraham  Percentage  Table 
and  it  would  have  been  difficult  and  confusing  to  establish  different  differentials 
from  different  western  territories;  therefore,  a  general  differential  applying  to  all 
Central  Freight  Association  territory  was  agreed  to." 

345 


3-46  ATLANTIC    PORT   DIFFERENTIALS 

REPORT  OF  THE  COMMISSION. 

Harlan,  Com missio ner : 

The  Saginaw  Board  of  Trade,  composed  of  merchants  and  shippers 
engaged  in  business  in  the  city  of  Saginaw,  in  the  state  of  Michigan, 
and  organized  for  the  purpose  of  promoting  the  growth  of  that  com- 
munity and  the  extension  and  increase  of  its  commerce,  has  joined  in 
this  complaint  with  the  Flint  Improvement  League,  an  association 
performing  a  like  function  for  the  city  of  Flint,  in  the  same  state,  with 
the  object  of  securing  reduced  rates  on  all  classes  of  freight  and  com- 
[129]  modities  between  the  Atlantic  coast  territory  and  the  cities  of 
Saginaw  and  Flint  and  other  points  within  the  counties  of  Saginaw  and 
Genesee.  These  counties  are  hereinafter  referred  to  as  the  Saginaw 
Valley  and  form  a  part  of  a  rate  group  known  as  the  92-per-cent.  zone. 
The  proceeding  was  instituted  not  only  in  the  interest  of  the  members 
of  the  two  associations,  but  also  on  behalf  of  all  receivers  and  shippers 
of  freight,  manufacturers,  jobbers,  wholesalers,  and  consumers  in  the 
Saginaw  Valley.  Upon  the  hearing  much  testimony  was  taken  before 
the  record  was  closed ;  but  shortly  after  the  case  had  been  submitted 
on  briefs  and  while  it  was  under  advisement  bj^  the  Commission,  the 
complainants  filed  a  motion  asking  that  the  record  be  reopened  for  the 
taking  of  further  testimony.  The  motion  was  granted  and  the  testi- 
mony of  numerous  additional  witnesses  was  thereupon  heard.  The 
case  was  then  again  submitted  on  briefs.  Its  consideration  has  been 
delayed  by  an  intimation  from  the  IMichigan  railroad  commission  in 
December  last  of  its  purpose  to  file  a  complaint  praying  for  a  general 
reduction  in  rates  to  and  from  all  points  in  the  lower  peninsula  of 
Michigan,  including  Saginaw  and  Flint.  But  as  no  such  petition  has 
been  filed  we  proceed  now  to  dispose  of  the  complaint  upon  the  record 
before  us. 

No  complaint  is  made  of  the  inherent  reasonableness  of  the  Saginaw 
Valley  rates  when  considered  by  themselves.  The  controversy  involves 
only  the  relation  of  those  rates  with  the  class  and  commodity  rates  of 
other  groups  or  zones  in  the  same  general  locality. 

The  groups  whose  rates  are  thus  brought  into  comparison  are  a  part 
of  an  extensive  rate  sj'stem  originally  established  in  1877  by  the  lines 
serving  the  territory  that  lies  east  of  the  Mississippi  River  and  north 
of  the  Ohio  River,  now  frequently  referred  to  as  the  percentage  basis 
territory.  This  territory  is  practically  coterminous  with  what  is 
known  as  Central  Freight  Association  territory  and  embraces  Illi- 
nois, Indiana,  Ohio,  and  the  peninsula  of  Michigan.  It  also  includes 
certain  ports  on  Lake  Michigan  in  the  state  of  Wisconsin ;  it  takes  in 
Louisville  and  the  south  shore  of  the  Ohio  River  in  northeastern  Ken- 


SAGINAW  BOARD  OP  TRADE,  ET  AL.,  V.  G.  T.  RY.,  ET  AI..      347 

lucky;  it  includes  the  northwest  corner  of  the  state  of  Pennsylvania, 
and  extends  to  a  portion  of  the  province  of  Ontario  lying-  just  north 
of  Lake  Erie  and  Lake  Ontario.  Within  these  boundaries  there  are 
about  8,000  railway  stations  which  have  been  divided  or  segregated 
for  rate-making  purposes  into  what  are  called  percentage  zones.  The 
rates  to  and  from  these  groups  are  made  up  upon  a  system,  commonly 
called  the  percentage  zone  system,  that  is  not  in  use  elsewhere  in  the 
United  States. 

Under  the  plan  first  adopted  the  system  embraced  only  junction  or 
competitive  points.  The  rate  from  Chicago  to  New  York  was  taken 
as  the  unit  or  100  per  cent,  basis,  and  the  rates  to  Atlantic  coast  terri- 
tory were  fixed  at  a  percentage  of  the  rate  from  Chicago  to  New  York, 
the  several  junction  or  competitive  points  taking  rates  higher  [130] 
or  lower  than  the  Chicago  rate  as  they  were  less  or  more  distant  from 
New  York,  by  the  shortest  route  "worked  or  workable,"  than  was 
Chicago.  This  made  practically  a  distance  tariff.  But  after  several 
years  of  actual  experience  with  it  that  plan  was  modified  and  the  rates 
now  in  effect  were  worked  out  on  the  following  general  basis : 

From  an  assumed  rate  of  25  cents  from  Chicago  to  New  York  there 
v^as  first  deducted  the  sum  of  6  cents  to  represent  the  fixed  terminal 
expenses  at  the  points  of  origin  and  destination.  The  remaining  19 
cents  represented  the  assumed  charge  for  the  rail  haul  exclusive  of 
any  service  at  either  terminal.  This  rate  being  divided  bj^  920,  that 
being  the  accepted  short-line  mileage  from  Chicago  to  New  York, 
yielded  a  rate  per  mile  of  0.0206  cents  for  a  movement  from  Chicago 
to  New  York  under  the  assumed  rate ;  and  this  rate  per  mile  was  used 
as  the  factor  for  establishing  an  assumed  rate  from  any  particular 
junction  or  competitive  point  on  the  basis  of  its  mileage  to  New  York. 
That  factor  or  rate  per  mile  multiplied  by  the  number  of  miles  from 
the  particular  point  to  New  York  gave  an  assumed  rate  for  the  rail 
haul  from  that  point  exclusive  of  any  terminal,  service  at  either  end  of 
the  movement.  To  that  assumed  rate  the  6  cents  was  again  added  to 
cover  the  terminal  expenses  at  the  points  of  origin  and  destination. 
The  result  gave  an  assumed  rate  from  the  particular  point  to  New 
York,  including  the  terminal  charges.  And  the  percentage  which  this 
assumed  rate  bore  to  the  assumed  rate  of  25  cents  from  Chicago  to  New- 
York  determined  the  percentage  of  the  Chicago  rate  which  the  par- 
ticular point  would  take  on  any  given  class  of  merchandise. 

That  is  the  general  foundation  upon  which  rests  the  whole  structure 
of  eastbound  and  westbound  rates  in  the  percentage  basis  territory. 
The  system  has  no  official  character — that  is  to  say,  its  bases  have  not 
been  filed  with  the  Commission.     It  was  simply  a  general  understand- 


348  ATLANTIC    PORT   DIFFERENTIALS 

ing  intended  as  a  guide  to  rate  makers  in  establishing  the  specific 
rates  that  are  published  and  filed  with  the  Commission  and  govern 
traffic  between  the  Atlantic  coast  territory  and  points  in  the  territory, 
the  boundaries  of  which  have  just  been  described.  In  order  to  avoid 
the  charge  that  such  rates  were  the  result  of  a  concert  of  action  be- 
tween the  carriers  serving  those  territories,  it  was  understood,  as  we 
are  informed,  that  the  system  should  be  a  minimum  system  of  rates 
and  not  a  maximum  system.  Theoretically  it  was  also  intended  to 
apply  onl}'  in  the  construction  of  rates  to  and  from  junction  and  com- 
petitive points.  The  rates  to  and  from  noncompetitive  points  were 
made  up  originally  by  adding  a  local  or  arbitrary  rate  from  such 
points  to  some  nearby  junction  or  competitive  point  to  w'hich  a  rate 
percentage  had  been  assigned.  But  in  the  progress  of  time  the  sj^steni 
was  subjected  to  gradual  modifications  resulting  in  the  extension  to 
adjacent  noncompetitive  points  of  the  rate  to  or  from  the  junction  or 
competitive  point,  thus  eliminating  the  addition  of  the  local  or  arbi- 
[131]  trary  rates  just  mentioned.  Moreover,  while  the  system  was  in- 
tended to  afford  a  minimum  basis  only,  as  a  matter  of  fact  the  mini- 
mum percentages  in  the  course  of  time  became  the  maximum  rates. 
The  extension  to  adjacent  points  of  the  rates  to  and  from  nearby  junc- 
tion and  competitive  points  resulted  in  the  formation  of  rate  zones  or 
groups  of  arbitrary  shape  and  varying  size,  in  some  cases  projecting 
into  two  states,  all  points  in  a  particular  group  taking  the  same  per- 
centage of  the  Chicago-Xew  York  rate  on  traffic  to  and  from  the  At- 
lantic coast  territory. 

The  general  nature  of  the  system  may  be  illustrated  by  reference 
to  one  or  two  representative  points.  Springfield,  in  the  state  of  Ohio, 
for  example,  is  in  the  82-per-cent.  zone.  Xenia  is  tlie  basing  point  for 
that  group.  Its  distance  to  New^  York  at  the  time  this  system  was  es- 
tablished was  700  miles.  If,  now,  we  multiply  the  factor  referred  to, 
namely,  0.0206,  by  700,  we  get  14.-12  cents ;  and  if  to  this  we  add  the  6 
cents  representing  the  terminal  expenses  at  both  ends  of  the  movement, 
we  get  20.42  cents  as  an  assumed  rate  from  Xenia  to  New^  York,  which 
is  81.7  per  cent,  of  the  assumed  rate  of  25  cents  from  Chicago  to  New 
York ;  and  under  the  application  of  a  general  rule  for  the  disposition  of 
fractions  resulting  from  such  computations,  a  fraction  exceeding  one- 
half  of  1  per  cent,  is  considered  a  full  per  cent.  A  percentage  of  82  is 
thus  arrived  at  as  the  basis  for  constructing  the  rates  from  that  group, 
and  the  rates  from  Springfield  are  therefore  82  per  cent,  of  the  Chi- 
cago-New York  rates.  Again,  Fort  AVayne,  in  the  state  of  Indiana, 
is  in  a  90-per-cent.  zone.  In  arriving  at  that  percentage,  Muncie  was 
taken  as  the  basing  point.     The  distance  from  IMuncie  to  Lima  via 


SAGINAW  BOARD  OP  TRADE,  ET  AL.,  V.  G.  T.  RY.,  ET  AL.      349 

the  Lake  Erie  &  Western  is  85  miles,  and  the  distance  from  Lima  to 
New  York  via  the  Pennsjdvania  lines,  before  they  were  reconstructed 
east  of  Pittsburgh,  was  713  miles,  making  a  total  distance  of  798  miles 
by  the  shortest  route  "worked  or  workable."  If  the  same  factor  be 
multiplied  by  798  we  get  an  assumed  rate  from  Muncie  to  New  York 
of  16.44  cents,  exclusive  of  terminal  charges.  Adding  6  cents  to 
cover  those  expenses,  we  arrive  at  an  assumed  rate  between  those  points 
of  22.44  cents,  including  terminal  charges,  which  is  89.76  per  cent,  of 
the  assumed  rate  of  25  cents  from  Chicago  to  New  York.  The  specific 
rates  from  Fort  Wayne  as  published  by  the  trunk  lines  are  therefore 
made  up  on  the  basis  of  90  per  cent,  of  the  Chicago-New  York  rates, 
the  0.76  of  1  per  cent,  being  taken  as  a  whole  per  cent. 

In  building  up  the  system  efforts  were  made  to  avoid,  so  far  as  pos- 
sible, all  infractions  of  the  long  and  short  haul  clause  of  the  act.  The 
boundaries  of  the  groups  are  the  lines  of  railroads,  and  the  point 
around  which  each  group  has  been  constructed  as  a  basing  point  is  or- 
dinarily the  most  distant  point  from  New  York  in  the  group  by  the 
most  direct  workable  route.  Water  competition  and  the  participation 
by  [132]  north  and  south  lines,  such  as  the  Monon,  in  the  traffic  be- 
tween the  Atlantic  coast  territory  and  the  percentage-basis  territory, 
as  well  as  other  competitive  elements,  have  naturally  had  some  effect  in 
the  shaping  of  the  several  zones.  New  roads  have  been  built  and  new 
routes  established  since  the  percentages  of  the  several  groups  were  orig- 
inally assigned,  and  this  in  some  instances  has  resulted  in  material 
changes  in  rates.  Newly  developed  traffic  and  other  conditions  have 
also  been  considered  and  from  time  to  time  have  led  to  alterations  in 
the  percentages  of  some  points.  Although  the  effect  of  these  influences 
on  the  form  and  boundaries  of  the  percentage  zones  is  not  without 
interest,  it  will  not  be  necessary  to  dwell  here  upon  those  features  of 
the  system.  While  it  is  not  always  a  simple  matter  when  examining 
a  map  of  the  percentage  group  territory  to  understand  and  at  once 
comprehend  the  causes  that  have  produced  zones  or  groups  of  such 
irregular  outline,  nevertheless  a  careful  study  of  particular  groups, 
and  some  knowledge  of  the  transportation  conditions  that  surround  and 
affect  them,  have  given  us  the  general  impression  that  their  bound- 
aries have  been  established  upon  substantial  and  presum.ably  somid 
grounds.  The  fact  that  no  group  rates  in  this  country  have  been 
subjected  to  less  criticism  than  the  rates  to  and  from  the  percentage- 
basis  territory  and  the  Atlantic  coast  is  some  evidence  of  the  care  with 
which  the  system  has  been  developed.  So  far  as  a  cursory  examina- 
tion of  the  records  of  the  Commission  has  disclosed,  there  have  been, 
until  this  petition  was  filed,  but  three  other  formal  proceedings  since 


350  ATLANTIC    PORT   DIFFERENTIALS 

the  organization  of  the  Commission  in  1887,  in  which  complaint  was 
made  of  the  percentage  assigned  to  a  particular  group:  Detroit  Board 
of  Trade  v.  Grand  Trunk  Rij.  of  Canada,  2  I.  C.  C.  Rep.  315;  Pratt 
Lumber  Co.  v.  C.,  I.  &  L.  Ry.  Co.,  10  I.  C.  C.  Rep.  29 ;  Green  Bay  Busi- 
ness Men's  Association  v.  L.  S.  &  M.  S.  Ry.  Co.,  15  I.  C.  C.  Rep.  59. 
Moreover,  the  enormous  commerce  that  proceeds  to  and  from  Central 
Freight  Association  territory  has  not  only  adjusted  itself  to  this  sys- 
tem of  rates,  but  shippers  engaged  in  that  commerce  have  thoroughly 
understood  it  for  a  score  and  more  of  years.  While  traffic  and  trans- 
portation conditions  will  doubtless  change  from  time  to  time  and  thus 
necessitate  alterations  in  the  zone  boundaries,  such  modifications  must 
necessarily  be  made  with  deliberation  and  only  upon  adequate  grounds. 

As  heretofore  stated,  the  complainants  make  no  attack  upon  the 
reasonableness,  in  and  of  themselves,  of  the  rates  now  offered  by  the 
defendants  to  the  shippers,  merchants,  and  manufacturers  of  Saginaw 
Valley.  The  claim  is  simply  that  the  percentage  adopted  by  the  de- 
fendant carriers  to  fix  the  rates  for  Saginaw  Valley  is  too  high  when 
compared  with  the  percentage  that  fixes  the  rates  enjoyed  by  other 
groups  relativelj^  located  and  where  the  conditions  of  traffic  and  trans- 
portation, as  the  complainants  allege,  are  substantially  similar.  The 
[133]  comparison  upon  which  the  alleged  discrimination  is  based  is 
made  more  particularly  with  the  Toledo-Detroit  group  or  zone.  The 
Saginaw  Valley  group,  as  stated,  takes  rates  that  are  92  per  cent,  of 
the  Chicago  rates.  Toledo  and  Detroit  are  in  a  78-per-cent.  zone.  The 
result,  at  the  time  of  the  first  hearing  of  the  complaint,  was  a  relation 
of  rates  between  the  two  groups  that  enabled  the  jobbers  and  whole- 
salers of  Toledo  and  Detroit  to  distribute  their  merchandise  at  many 
points  in  northern  and  western  Michigan  at  a  slightly  less  cost  for 
transportation  than  it  costs  the  jobbers  and  wholesalers  of  Saginaw 
Valley.  The  more  favorable  percentage  rates  into  Detroit  and  Toledo 
and  the  adjustment  of  the  local  rates  out  gave  this  advantage  to  De- 
troit and  Toledo  merchants. 

These  differences  in  the  aggregate  through  charges  to  points  of  con- 
sumption, when  in  favor  of  Detroit  and  Toledo,  had  to  be  absorbed 
by  the  jobbers  and  merchants  of  Saginaw  Valley,  at  the  time  the  com- 
plaint was  filed,  in  order  to  enable  them  to  compete  with  the  jobbers 
of  Toledo  and  Detroit  in  that  part  of  the  state  of  Michigan  which  the 
complainants  regard  as  tributary  to  the  distributing  points  of  Saginaw 
Valley.  But  after  the  first  hearing,  as  we  were  assured  at  the  second 
hearing,  these  inequalities  were  corrected  by  the  Pere  ^larquette  Rail- 
road by  a  readjustment  of  its  local  rates  out  of  Saginaw  Valley  in  such 
manner  as  to  enable  the  wholesale  merchants  of  Saginaw  now  to  dis- 


SAGINAW  BOARD  OF  TRADE.  ET  AL.,  V.  G.  T.  RY.,  ET  AL.      351 

tribute  their  wares  to  points  in  northern  and  western  Miehigan  at  an 
aggregate  cost  for  the  entire  transportation  from  eastern  territory  that 
is  no  longer  in  excess  of  the  total  cost  of  transportation  paid  b_y  the 
wholesale  merchants  of  Detroit  in  order  to  reach  the  same  destinations. 
The  snm  of  the  local  rates  from  eastern  points  to  the  western  points 
in  question  is  now  the  same,  as  we  are  told,  whether  based  on  Saginaw 
or  on  Detroit.  Assuming  the  accuracy  of  these  statements  and  also 
of  the  statement  that  the  Grand  Trunk  local  rates  were  never  out  of 
alignment  in  that  regard,  much  of  the  substance  of  the  grievance  al- 
leged by  the  complainants  has  already  been  removed.  But  counsel  foi" 
the  complainants  denies  that  the  corrections  have  been  made  as  stated, 
and  cites  Lansing  as  an  instance  where  the  sum  of  the  local  rates  via 
Saginaw  is  still  higher  than  the  sum  of  the  local  rates  based  on  De- 
troit. We  do  not  see,  however,  that  Lansing  may  fairly  be  regarded  as 
tributary  to  Saginaw;  and  as  we  are  referred  to  no  other  instance  of 
inequality  the  statement  that  a  readjustment  has  been  effected  must  be 
taken  as  well  founded. 

There  remains  for  examination  the  allegation  that  the  percentage 
assigned  to  the  Saginaw  Valley  group  is  too  high  when  compared  with 
the  percentages  assigned  to  other  groups  in  ad.jacent  territory.  In 
this  connection  the  complainants  contend  that,  inasmuch  as  Saginaw 
Valley  is  situated  between  the  eighty-third  and  eighty-fifth  meridians, 
the  Saginaw  rates  should  be  on  a  relatively  equal  percentage  with  all 
[134]  other  points  between  those  meridians,  including  Detroit  and 
Toledo  and  points  in  southeastern  Michigan  and  western  Ohio.  The 
percentage  sj^stem,  however,  was  not  based  on  longitude,  and  we  need 
not  stop  to  consider  the  reasonableness  of  the  Saginaw  Valley  rates 
from  a  point  of  view  that  attaches  no  significance  to  transportation  or 
traffic  conditions,  and  concedes  no  importance  to  the  other  factors 
upon  which  the  system  largely  rests. 

The  record  does  not  give  us  the  history  of  the  Saginaw  percentage. 
Our  own  investigations  indicate,  however,  that  no  specific  percentage 
was  used  in  connection  with  Saginaw  rates  until  January  28,  1890, 
when  the  westbound  rates  from  New  York  to  that  point  were  equalized 
with  the  rates  to  Chicago  by  being  ad.justed  on  a  100  per  cent,  basis. 
Apparently  the  schedules  were  again  revised  in  1892,  and  on  May  2  of 
that  year  the  Saginaw  rates  were  reduced  to  the  present  92  per  cent, 
basis.  In  the  meantime,  as  is  to  be  inferred  from  the  information 
before  us,  the  rates  to  and  from  Flint,  which  is  some  distance  south  of 
Saginaw^  and  more  adjacent  to  the  direct  through  lines,  had  already 
been  fixed  on  this  percentage,  arrived  at  on  the  basis  of  the  mileage 
by  the  Flipt  ^  Pere  Marquette  Railroad  from  Flint  to  Toledo  and 


352  ATLANTIC    PORT    DIFFERENTIALS 

thence  via  the  Pennsylvania  lines  to  New  York.  This  route  at  that 
time  involved  a  haul  of  828  miles,  and  on  the  formula  heretofore  ex- 
plained gave  to  Flint  rates  that  were  92  per  cent,  of  the  Chicago  rates. 
The  revision  of  1892  resulted  in  the  extension  of  this  percentage  to 
Saginaw.  It  is  our  understanding  also  that  at  that  time  the  mileage 
of  the  Grand  Trunk  from  New  York  through  the  Buffalo  gateway  to 
the  Saginaw  Valley  was  about  the  same  through  Port  Huron  as  through 
Detroit,  and  involved  a  haul  of  828  miles  which,  worked  out  on  the 
formula,  would  put  Saginaw  practically  on  the  92-per-cent.  basis. 
Since  that  time  the  Grand  Trunk,  having  acquired  a  number  of  small 
Canadian  roads,  has  through  that  means  and  by  the  reconstruction  of 
old  lines  reduced  its  distance  from  Port  Huron  to  Buffalo  from  229 
to  196  miles,  and  has  otherwise  shortened  its  route  to  Saginaw  through 
Port  Huron.  Port  Huron  is  therefore  the  gateway  to  Saginaw  that 
now  gives  the  short  line  over  that  road.  It  is  interesting,  however,  in 
this  connection  to  note  that  Durand,  which  is  well  to  the  south  of 
Saginaw,  was  then  in  the  95-per-cent.  group  and  was  reduced  to  a  92- 
per-cent.  basis  in  order  that  the  Grand  Trunk  might  use  that  route  to 
and  from  Saginaw  without  violating  the  fourth  section  of  the  act. 
Such,  as  we  understand  the  matter,  is  the  history  of  the  present  Sagi- 
naw percentage.  It  is  based  on  the  mileage  through  Toledo  and  is  in 
substantial  accord  with  the  old  mileage  of  the  Grand  Trunk  through 
Detroit. 

But  the  complainants  contend  that  the  short  line  at  this  time  from 
New  York  is  not  through  Toledo,  but  through  the  Niagara  frontier, 
and  involves  a  haul  to  New  York  of  only  731  miles.  It  is  also  said 
[135]  that  a  large  proportion  of  the  Saginaw  tonnage  takes  that  route. 
They  insist  that  Saginaw  is  therefore  entitled  to  a  rate  basis  of  81  per 
cent,  according  to  the  general  formula  underlying  the  percentage  basis 
system.  Comparing  the  distance  of  Saginaw  from  New  York  by  the 
Niagara  short  line  with  the  mileage  from  Kalamazoo,  Detroit,  Muske- 
gon, Toledo,  Dayton,  Cincinnati,  Marion,  Middlefield,  Indianapolis, 
Connersville,  and  other  important  centers  in  Michigan,  Ohio,  and  In- 
diana, the  complainants  insist  that  Saginaw  is  entitled  to  that  per- 
centage, and  ought  to  be  put  on  an  82-per-cent.  basis,  when  its  short- 
line  mileage  through  the  Niagara  frontier  is  compared  with  the  short - 
line  mileage  of  Detroit  and  Toledo.  That  contention,  however,  is 
based  on  a  single  factor  in  the  situation,  namely,  the  present  short-line 
mileage  of  Saginaw,  and  not  upon  a  general  view  of  the  whole  rate 
adjustment  of  which  Saginaw  forms  only  a  modest  part. 

The  proximity  of  Toledo,  Detroit,  and  the  other  communities  named 
in  the  complainants'  comparison,  to  the  great  channels  of  through 


SAGINAW  BOARD  OF  TRADE,  ET  AL.,  V.  G.  T.  RY.,  ET  AL,      353 

transportation,  their  location  on  direct  through  routes  Avhere  the  den- 
sity of  traffic  is  very  great  and  the  general  operating  and  traffic  con- 
ditions are  favorable,  are  elements  that  can  not  be  ignored  by  the  rate 
maker  and  must  necessarily  tend  to  lower  rates  than  can  be  accorded 
to  communities  that  are  removed  from  these  great  streams  of  traffic. 
The  Saginaw  Valley  lies  well  to  the  north  of  the  through  lines  between 
Chicago  and  New  York  and  is  more  or  less  remote  from  the  direct  cur- 
rent of  the  great  volume  of  interstate  movements  between  the  east  and 
the  west.  While  there  is  a  substantial  traffic  to  Saginaw  and  Bay  City 
there  is  comparatively  little  traffic  through  and  beyond  either  point. 
These  facts  ought  to  have  and  necessarily  must  have  a  material  influ- 
ence when  considering  the  relation  between  the  Saginaw  Valley  rates 
and  the  other  group  rates  to  which  the  complainants  refer.  But  in 
demanding  an  84-per-cent.  basis  on  behalf  of  Saginaw  Valley  the  com- 
plainants have  disregarded  all  such  circumstances  and  have  also  failed 
to  take  into  account  the  effect  that  such  an  order  as  they  demand  would 
have  on  the  general  rate  adjustment  in  the  peninsula  of  Michigan. 

Jackson,  which  is  769  miles  from  New  York  by  its  shortest  lines,  is 
in  the  92-per-eent.  zone  with  Saginaw,  yet  no  complaint  as  to  its  rates 
has  been  made  on  its  behalf.  Nor  has  any  complaint  been  made  by 
the  numerous  other  points  in  that  zone.  If  its  mileage  alone  be  con- 
sidered Jackson  ought  to  be  on  an  87-per-cent.  basis.  Lansing,  which 
is  763  miles  from  New  York  by  its  shortest  line,  is  in  the  95-per-cent. 
zone  next  west  of  the  Saginaw  zone.  No  complaint  has  been  made  as 
to  its  rates,  although  the  formula,  on  its  exact  short-line  mileage, 
would  give  Lansing  rates  based  on  87  per  cent,  of  the  Chicago  rates. 
Throughout  the  95-per-cent.  zone,  and  throughout  the  96-per-eent.  zone 
[136]  that  intervenes  before  we  reach  the  100-per-cent.  Chicago  group, 
are  numerous  points  of  more  or  less  importance,  and  with  short-line  dis- 
tances to  New  York  greater  than  the  short-line  mileage  of  Saginaw 
by  from  onlj'  30  to  75  miles.  And  yet  no  complaint  has  been  made  as 
to  their  rates.  Nothing  can  be  more  certain,  however,  than  that  a 
reduction  of  the  Saginaw  and  Flint  rates  to  an  84-per-cent.  basis,  as 
demanded,  would  throw  all  the  peninsula  rates  into  confusion  and 
would  be  followed  at  once  by  demands  from  all  these  points  for  cor- 
responding reductions  in  their  percentages ;  for  an  examination  of  the 
zone  map  could  not  fail  to  lead  the  merchants  and  shippers  of  these 
other  communities  to  the  conclusion  that  the  present  rates  are  adjusted 
on  a  reasonable  and  a  fairly  logical  relation  and  that  any  reduction  in 
the  Saginaw  rates  ought  therefore  to  be  followed  by  a  like  reduction  in 
their  rates.  It  may  be  well  here  again  to  call  attention  to  the  fact  here- 
tofore stated  that  as  a  rule  the  extreme  point  in  each  zone  is  used  as  the 

23 


354  ATLANTIC    PORT   DIFFERENTIALS 

basing  point  for  fixing  a  percentage  for  the  whole  zone.  As  in  all 
group  systems  there  is,  therefore,  an  inequality  in  rates  Avhen  distance 
alone  is  considered,  as  between  points  on  one  side  of  a  group  and  the 
points  on  the  other  side.  This  is  particularly  true  of  the  96-per-cent. 
zone  to  which  attention  has  been  called.  Tt  is  no  less  true  of  the  92- 
per  cent,  zone  in  which  the  Saginaw  Valley  is  located.  If,  therefore, 
Saginaw  and  Flint  are  to  be  dealt  with  separately  and  on  the  basis  of 
their  own  short-line  mileage  regardless  of  all  other  considerations,  we 
shall  be  forced  to  deal  with  each  point  in  other  groups  separately,  and 
thus  lead  to  the  gradual  disruption  of  a  rate  system  which  is  now  quite 
•an  old  one  and,  as  heretofore  stated,  has  seldom  been  attacked  before 
the  Commission. 

There  is  still  left  for  consideration  the  alleged  discrimination  in 
favor  of  Detroit  and  Toledo.  When  asked  at  the  second  hearing 
whether  the  percentage  upon  which  the  Detroit  and  Toledo  rates  are 
based  was  the  result  of  water  competition  the  rate  experts  for  the  de- 
fendants stated  that  they  had  not  understood  that  water  competition 
had  at  any  time  affected  the  rates  to  and  from  those  points.  Their 
view  was  that  such  competition  was  not  the  explanation  of  the  78-per- 
cent, basis  on  which  those  rates  are  established.  "We  are  strongly  in- 
clined to  think,  however,  that  in  this  they  were  mistaken.  There  can 
be  no  doubt  that  the  location  of  Detroit  upon  the  St.  Clair  River,  in 
the  very  heart  of  lake  navigation,  is  in  part  at  least  the  explanation  of 
the  growth  of  that  community  to  its  present,  dimensions  and  impor- 
tance. There  can  be  scarcely  less  doubt  of  the  favorable  effect  of  its 
water  facilities  upon  the  growth  and  prosperity  of  Toledo.  The  his- 
tory of  the  percentage  now  enjoyed  by  both  places  shows,  as  we  under- 
stand it,  that  it  was  the  result,  if  not  of  actual  water  competition,  at 
least  of  a  very  strong  potential  competition  arising  from  their  location 
on  the  lakes.  On  April  13,  1876,  Detroit  was  on  an  85  anfl  Toledo  on  a 
[137]  78-per-cent.  basis.  On  June  23,  1879,  the  basis  as  to  both  points 
was  made  811/2  per  cent.,  which  on  April  14,  1880,  was  reduced  to  751/2 
per  cent.  That,  however,  was  regarded  as  too  low,  and  on  June  1,  1883, 
both  points  were  put  on  a  78-per-cent.  basis,  which  is  still  in  effect. 
This  level  of  rates  was  arrived  at,  as  we  are  advised,  by  taking  714 
miles  as  the  distance  of  Toledo  from  New  York,  and  putting  Toledo  on 
an  exact  mileage  basis  as  compared  with  Chicago,  then,  as  now,  taken 
for  rate-making  purposes  as  920  miles  distant  from  New  York.  As  a 
concession,  as  we  understand  it,  to  water  competition  or  to  a  highly 
potential  water  competition,  the  formula,  heretofore  referred  to  as 
the  underlying  basis  of  the  system,  was  departed  from  in  this  instance 
by  ignoring  the  deduction  of  6  cents  for  terminal  charges,  thus  giving 


SAGINAW  BOARD  OP  TRADE,  ET  AL.,  V.  G.  T.  RY.,  ET  ALi.      355 

to  Toledo  a  relation  of  rates  in  exact  accordance  with  its  mileage  as 
compared  with  the  Chicago  mileage.  This  resulted  in  a  percentage 
of  77.6,  and  following  the  rule  for  the  disposition  of  fractions  the  78- 
per-cent.  basis  was  arrived  at.  And  in  view  of  the  close  alliance  of 
the  commercial  interests  of  Toledo  with  those  of  Detroit  that  basis 
was  also  made  effective  at  Detroit.  This  relation  of  rates  was  ques- 
tioned by  the  Board  of  Trade  of  Detroit  in  a  proceeding  before  us 
against  the  Grand  Trunk  and  other  railroads  (2  I.  C.  C.  Rep.  315)  ; 
but,  upon  a  careful  consideration  of  all  the  conditions,  was  sustained. 

It  has  recently  been  said  that  more  tonnage  passes  to  and  from  and 
beyond  Detroit  in  twenty-four  hours  than  enters  and  leaves  all  the 
great  Atlantic  ports  together  in  the  same  length  of  time.  In  this 
statement  there  is  more  or  less  exaggeration  if  it  was  intended  to  in- 
clude the  coastwise  tonnage  with  the  foreign  tonnage  of  the  Atlantic 
ports ;  but  in  any  event  the  traffic  passing  into  and  out  of  the  St.  Clair 
River  is  very  large  and  must  necessarily  have  no  little  influence  on 
the  rail  rates  to  and  from  Detroit.  The  same  conditions  must  also 
affect  the  rail  rates  to  and  from  Toledo.  Bay  City,  which  is  the  near- 
est lake  port  through  which  Saginaw  may  forward  and  receive  traffic 
by  the  Great  Lakes,  is  at  the  extreme  end  of  Saginaw  Bay,  and  to 
reach  that  port  and  return  to  the  regular  channel  of  through  lake  navi- 
gation would  require  a  steamer  to  diverge  probably  as  much  as  150 
miles  from  its  course.  This  disadvantage  in  location  is  a  burden 
which,  in  the  very  nature  of  things,  the  shippers  and  merchants  of 
Saginaw  Valley  must  always  bear.  And  it  would  be  wholly  improper 
for  the  Commission  to  attempt,  by  any  order  it  might  enter,  to  equalize 
those  conditions  with  the  advantages  enjoyed  by  the  merchants  of  De- 
troit and  Toledo  because  of  the  superior  location  of  those  two  points 
on  the  regular  line  of  lake  navigation.  Enterprise  Mfg.  Co.  v.  Georgia 
K.  R.  Co.,  12  I.  C.  C.  Rep.  451. 

Upon  the  whole  record  and  from  a  rather  extended  investigation 
outside  the  record,  we  are  led  to  conclude,  now  that  the  distributing 
rates  out  of  Saginaw  Valley  have  been  corrected,  that  no  ground  of 
[138]  complaint  is  left  that  justly  requires  the  disturbance  of  the  rates 
between  Saginaw  Valley  points  and  the  Atlantic  coast  territory.  The 
record  makes  it  entirely  clear  that  SaginaAV  as  a  community  is  not  now 
suffering  and  has  not  suffered  materially  in  the  past  from  an  excessive 
cost  for  transportation.  On  the  contrary,  both  Saginaw  and  Flint 
during  the  last  ten  years  have  enjoyed  a  prosperity  that  has  been  quite 
notable.  Each  of  the  two  cities  has  grown  rapidly  both  in  population 
and  in  the  number  and  variety  of  its  industries,  and  the  gross  sales 
of  the  particular  merchants  who  testified  before  us  have  shown  a  grati- 


356  ATLANTIC    PORT    DIFFERENTIALS 

fying  and  healthy  yearly  increase.  While  the  expense  of  conducting 
their  business  may  have  been  greater  during  the  last  three  or  four  years 
than  formerly,  this  has  been  due  to  other  causes  than  the  cost  of  trans- 
portation, and  has  been  the  experience  everywhere  in  all  lines  of  enter- 
prise during  the  same  period. 

For  these  reasons  the  complaint  must  be  dismissed.     It  will  be  so 
ordered. 


I 


BOARD  OF  TRADE  OF  THE  CITY  OF  CHICAGO 

V. 

ATLANTIC  CITY  RAILROAD  COMPANY,  ET  AL. 


NEW  YORK  PRODUCE  EXCHANGE 

V. 

NEW  YORK  CENTRAL  &  HUDSON  RIVER  RAILROAD  COM- 
PANY, ET  AL. 

20  I.  C.  C.  504. 


357 


I 


BOARD  OP  TRADE  OP  THE  CITY  OP  CHICAGO 

V. 
ATLANTIC  CITY  RAILROAD  COMPANY,  ET  AL, 


NEW  YORK  PRODUCE  EXCHANGE 


NEW  YORK  CENTRAL  &  HUDSON  RIVER  RAILROAD  COMPANY,  ET  AL. 

Decided  April  4,  1911. 
(20  I.  C.  C.  504.) 

Complaints  herein  attack  what  are  known  as  ex-lake  rates  on  grain  from  Buffalo  to 
eastern  points;  in  No.  3575  the  complaint  is  directed  against  both  domestic 
and  export  rates,  while  in  No.  3319  export  rates  alone  are  involved;  upon  the 
facts  disclosed  by  the  record,  and  for  the  reasons  given  in  the  report,  both  the 
complaints  are  dismissed. 

Chester  Arthur  Legg  and  Tf.  ill,  Hopkins  for  Chicago  Board  of 
Trade,  complainant. 

Baldwin,  Wadhams,  Bacon  d-  Fisher  for  New  York  Produce  Ex- 
change, complainant. 

Arthur  Geo.  Brown  and  John  B.  Daish  for  Baltimore  Chamber  of 
Commerce,  intervener. 

George  A.  Schroeder  for  Milwaukee  Chamber  of  Commerce,  inter- 
vener. 

George  H.  Evans  for  Indianapolis  Board  of  Trade,  intervener. 

31.  F.  Doyle  for  Cleveland  Grain  Company,  intervener. 

T.  A.  Grier  for  Peoria  Board  of  Trade,  intervener. 

L.  Richards  for  Quaker  Oats  Company,  intervener. 

J.  L.  Seager,  Edgar  H.  Boles,  E.  A.  Taylor,  0.  E.  Bntterfield,  and 
Clyde  Brown  for  Cleveland,  Cincinnati,  Chicago  &  St.  Louis  Railway 
Company  and  others. 

Ernest  S.  Ballard  for  New  York  Central  Lines. 

REPORT  OP  THE  COMMISSION. 

Prouty,  Commissioner: 

Both  the  above  complainants  attack  what  are  known  as  ex-lake  rates 
upon  grain  from  Buffalo  to  eastern  points.  In  No.  3575  the  complaint 
is  directed  against  both  domestic  and  export  rates,  while  in  No.  3319 

359 


360  ATLANTIC   PORT   DIFFERENTIALS 

export  rates  alone  are  involved.     The  two  cases  were  heard  together 
and  may  be  disposed  of  in  a  single  report. 

DOMESTIC   RATES. 

Grain  can  move  from  the  western  field  of  production  to  the  eastern 
point  of  consumption  either  by  some  all-rail  route  or  by  what  is  known 
as  the  rail-and-water  route.  In  the  latter  case  it  is  carried  from  the 
point  of  production  to  some  port  upon  the  Great  Lakes,  like  Chicago 
or  Duluth,  by  rail,  is  taken  from  the  western  lake  port  by  water  to 
some  eastern  lake  port,  of  which  Buffalo  is  the  principal  one,  and  is 
thence  transported  by  rail  to  destination.  When  grain  takes  the  all- 
rail  route  it  may  pass  through  Chicago  or  it  may  reach  its  eastern  des- 
tination without  entering  that  market.  If  it  takes  the  rail-and-water 
route,  it  must  move  through  some  lake  port,  of  which  Chicago  is  the 
largest.  It  is  therefore  for  the  advantage  of  Chicago  that  such  rates 
should  be  maintained  as  will  permit  grain  to  move  by  the  water  route. 
The  board  of  trade  of  that  city,  which  is  an  organization  having  in 
charge  the  grain  interests  of  that  community,  insists  that  rates  are  now 
so  constructed  as  to  divert  traffic  from  the  water  route  to  the  all-rail 
route  and  that  this  results  in  undue  prejudice  against  that  locality. 

The  position  of  the  complainant  will  be  best  understood  by  an  illus- 
tration drawn  from  the  rates  now  in  effect.  The  rate  on  wheat  from 
Chicago  to  Boston  is,  at  the  present  time,  18  cents  per  100  pounds. 
If  this  grain  moves  by  the  New  York  Central  lines  it  would  pass 
through  the  city  of  Buffalo  en  route  and  would  be  transported  from 
Buffalo  to  Boston  by  the  New  York  Central  &  Hudson  River  Railroad. 
For  this  service  that  carrier  would  receive,  under  the  present  adjust- 
ment of  rates,  7.9  cents  per  100  pounds,  that  being  its  division  of  the 
joint  through  rate  after  all  allowances  have  been  made  for  terminal 
expenses,  etc.  This  figure  is  taken  from  the  brief  of  the  complainant 
and  is  sufficiently  accurate  for  the  purpose  of  illustration. 

By  ex-lake  rates  are  meant  those  rates  which  apply  upon  grain 
reaching  Buffalo  from  the  west  by  w^ater.  The  present  ex-lake  rate 
on  wheat  from  Buffalo  to  Boston  is  13.3  cents  per  100  pounds.  This 
ex-lake  rate  includes  elevation ;  that  is,  the  taking  of  the  grain  from 
the  ship  into  the  elevator  and  again  loading  it  from  the  elevator  into 
the  car,  for  which  the  charge  is  one-half  cent  per  bushel,  or,  in  case 
of  wheat,  0.83  of  1  cent  per  100  pounds.  When  this  absorption  is 
deducted  from  the  ex-lake  charge  the  carrier  receives  [506]  for  han- 
dling the  grain  from  Buffalo  to  Boston  about  12.5  cents  per  100  pounds. 
The  cost  of  transporting  to  Boston  the  wheat  which  has  reached  Buffalo 
by  lake  is  to  every  practical  intent  the  same  as  that  of  transporting 


CHICAGO  BOARD  TRADE  V.  A.  C.  R.  CO.,  ET  .AL.  361 

the  wheat  which  has  come  to  Buffalo  b.y  rail,  and  the  complainant  in- 
sists that  when  the  New  York  Central  charges  for  handling  the  ex-lake 
wheat  12.5  cents,  while  it  handles  the  all-rail  grain  for  7.9  cents,  it  is 
guilty  of  an  unjust  discrimination  against  the  lake  grain,  and  there- 
fore against  the  city  of  Chicago,  which  is  interested  in  moving  the 
grain  by  water. 

The  defendants  reply  that  their  ex-lake  rate  from  Buffalo  to  Boston 
is  reasonable;  that  the  rate  from  Chicago  to  Boston  is  competitive,  and 
that  the  division  which  they  are  willing  to  accept  from  Buffalo  to  Bos- 
ton as  the  price  of  engaging  in  this  competitive  business  ought  not  to 
be  used  as  the  standard  by  which  to  measure  the  reasonableness  of 
their  ex-lake  rate  from  Buffalo.  In  passing  upon  the  validity  of  this 
defense  we  may  first  inquire  whether  the  ex-lake  rate  to  Boston  is  rea- 
sonable in  and  of  itself. 

The  present  domestic  ex-lake  rate  from  Buffalo  to  Boston  is  8  cents 
per  bushel,  equivalent  to  13.3  cents  per  100  pounds;  from  Buffalo  to 
New  York  6.5  cents  per  bushel,  or  10.8  cents  per  100  pounds.  These 
rates  apply  not  only  to  terminal  points,  but  to  interior  destinations, 
which  ordinaril}^  take  the  port  rate. 

The  movement  from  Buffalo  upon  the  domestic  rate  is  to  some  extent 
in  large  quantities  to  terminal  points,  but  there  is  also  an  extensive 
distributing  movement  under  which  grain  moves  from  Buffalo  in  single 
carload  lots  to  the  point  of  consumption.  The  ton-mile  revenue  pro- 
duced runs  from  5  mills  to  6.5  mills.  The  cost  of  moving  this  ex-lake 
grain  is  the  same  as  the  cost  of  moving  local  grain  originating  or  re- 
ceived at  Buffalo  except  that  in  case  of  business  from  the  Lakes  the 
carrier  absorbs,  as  a  part  of  its  rate,  the  elevation  charge  of  one-half 
cent  per  bushel,  and  therefore,  in  effect,  performs  this  service  in  ad- 
dition to  its  transportation.  If  the  reasonableness  of  this  rate  is  to  be 
determined  by  the  cost  to  the  carrier,  there  is  no  reason  why  the  ex- 
lake  rate  should  be  lower  than  the  local  rate.  In  the  Banner  Milling 
case,  19  I,  C.  C.  Rep.  128,  to  which  reference  is  subsequently  made  in 
this  report,  we  considered  the  rate  upon  flour  from  Buffalo  to  Boston 
and  New  York  and  finally  reached  the  conclusion  that  a  rate  of  13 
cents  to  Boston  would  not  be  excessive.  Ordinarily  the  same  rate  ap- 
plies to  the  movement  of  wheat  and  flour,  and  if  we  are  to  adhere  to 
this  rule  and  to  our  decision  in  the  Banner  Milling  case,  we  must  hold 
that,  while  domestic  ex-lake  rates  are  liberal,  they  are  not  so  high  as  to 
be  pronounced  unreasonable. 

This  wheat  moves  from  Chicago  to  Buffalo  largely  by  tramp  steamer, 
and  the  rate  under  which  it  moves  is  subject  to  the  most  active  com- 
petition.    While  many  attempts  have  been  made  to  control  this  com- 


362  ATLANTIC    PORT   DIFFERENTIALS 

[507]  petition,  they  have  never  succeeded,  and  the  resulting  rate  was 
during  the  season  of  1910  perhaps  lower  than  for  any  previous  season. 
It  was  said  that  wheat  had  moved  for  about  1.25  cents  per  bushel.  It 
will  be  seen  therefore  that  the  resulting  through  rate  from  Chicago  to 
Boston  b}'  lake  and  rail  is  a  reasonable  one,  and,  furthermore,  that  it 
is  materially  lower  than  the  all-rail  rate. 

It  also  appeared  that  this  avenue  of  transportation  is  available  under 
the  present  rates,  and  that  very  large  quantities  of  grain  seek  that 
avenue  at  the  present  time. 

It  should  be  noted  in  this  connection  that  the  thing  in  which  the 
public  is  primarily  interested  is  the  price  of  the  transportation.  It  is 
for  the  interest  of  the  consumer  and  the  producer  that  the  cost  of  car- 
riage should  be  reasonable ;  it  is  not  of  nuicli  importance  by  what  route 
the  traffic  is  handled,  unless  the  eff^ect  of  the  rate  adjustment  is  such 
as  to  deprive  the  public  of  proper  facilities  or  to  shut  up  the  water 
avenue  and  thereby  perpetuate  unreasonable  rates  b}'  rail.  While, 
however,  it  is  of  no  special  concern  to  the  general  public  whether  this 
grain  moves  through  Chicago  or  through  some  interior  market  like 
Peoria,  it  is  the  right  of  each  market  to  insist  upon  an  adjustment  of 
rates  which  is,  upon  the  whole,  just  to  it.  The  Chicago  Board  of  Trade 
did  not  in  the  present  case  urge  that  the  ex-lake  rate  was  unreasonable, 
but  it  did  insist  that  the  adjustment  of  rates  was  undulj'^  discrimina- 
tory against  that  market.  Its  claim  was  that  the  ex-lake  rate  from 
Buffalo  was  a  part  of  a  through  transportation  from  Chicago,  and  that 
the  line  east  of  Buffalo  had  no  right  to  impose  upon  that  through  traffic 
which  came  by  water  a  higher  rate  than  was  imposed  upon  similar 
traffic  which  came  to  Bufl^alo  by  rail;  and  this  is  the  real  question 
M'hieh  we  are  called  upon  to  decide  in  passing  upon  the  domestic  rate. 

It  is  well  understood  that  rates  on  grain  and  grain  products  from 
Chicago  to  the  various  Atlantic  ports  from  Norfolk  north  are  competi- 
tive, and  that  whenever  the  rate  to  any  one  of  these  ports  is  fixed  that 
to  all  the  others  must  be  and  always  is  correspondinglj^  adjusted. 
Grain  can  be  transported  from  Chicago  to  New  York  City  via  the 
Great  Lakes  to  Buffalo  and  from  thence  via  the  Erie  Canal  and  the 
Hudson  River.  This  route  originally  fixed  the  grain  rate  from  Chi- 
cago to  the  seaboard,  and  while  in  recent  years  the  competitive  influ- 
ence of  the  Erie  Canal  has  to  a  considerable  extent  disappeared  the 
existence  of  that  waterway  still  produces  a  profound  effect  upon  grain 
rates.  It  will  not  be  challenged,  certainly  not  by  the  gentleman  who  so 
forcibly  presented  the  case  of  the  Chicago  Board  of  Trade,  that  all 
grain  rates  from  Chicago  to  Atlantic-seaboard  territory,  including  Bos- 
ton are  highly  competitive. 


CHICAGO  BOARD  TRADE  V.  A.  C.  R.  CO.,  ET  AI^.  363 

The  New  York  Central  &  Hudson  River  Railroad  begins  at  Buffalo 
and  first  receives  grain  coming  from  Chicago  at  that  point,  but  it  is 
[508]  part  of  a  through  route  operated  by  the  New  York  Central  ^ya- 
tem,  which  handles  the  grain  all  the  way  from  Chicago  to  Boston.  If 
the  grain  moves  by  rail,  this  system  has  the  entire  haul  from  Chicago, 
while  if  it  moves  by  lake  to  Buffalo  and  by  rail  from  Buffalo,  it  only 
enjoys  the  haul  from  Buffalo  to  destination.  It  maj^  therefore  be  for 
the  interest  of  this  company  to  make  such  rate  from  Chicago  as  will 
move  the  traffic  by  rail,  although  that  portion  of  the  line  from  Buffalo 
to  Boston  receives  less  earnings  than  as  though  the  grain  were  taken 
up  for  the  first  time  at  Buffalo. 

But  what  is  even  more  significant  is  the  fact  that  the  New  York 
Central  system  from  Chicago  through  Buffalo  to  Boston  must  handle 
this  business  upon  a  rate  made  by  some  line  from  Chicago  to  the  sea- 
board which  does  not  serve  Buffalo,  or  at  least  which  can  not  handle 
grain  from  Buffalo  to  advantage  by  rail.  This  line  obtains  no  part  of 
the  traffic  which  goes  by  the  Great  Lakes  to  Buffalo,  and  must  make 
a  rate  in  competition  with  the  lake-and-rail  rate  in  order  to  obtain  a 
part  of  that  traffic.  A  road  like  the  Delaware,  Lackawanna  &  West- 
ern, which  is  not  financially  interested  in  any  railroad  operating  be- 
tween Chicago  and  Buffalo,  and  to  which  it  is  therefore  a  matter  of  in- 
difference whether  it  receives  the  grain  at  Buffalo  from  a  water  or  a 
rail  connection,  is  nevertheless  compelled  to  join  with  some  rail  line 
west  of  Buffalo  in  making  this  through  rate  and  to  receive  as  its  divi- 
sion a  less  sum  than  the  local  rate  from  Buffalo  as  the  only  condition 
upon  which  it  can  indulge  in  through-rail  business  from  Chicago.  It 
seems  plain  that  the  all-rail  rate  from  Chicago  east  competes  with  the 
lake-and-rail  rate,  and  that  therefore  the  division  of  the  line  east  of 
Buffalo  can  not  be  made  the  standard  hy  which  to  fix  a  reasonable  rate 
from  Buffalo. 

If  the  rate  to  Buffalo  were  reduced  the  effect  would  be  to  make  the 
cost  of  transportation  via  the  lake-and-rail  route  less  than  at  present, 
which  must  lead  to  a  corresponding  reduction  of  the  all-rail  rate,  pro- 
vided the  rail  carriers  are  to  compete  for  that  business ;  but  this  would 
in  no  respect  benefit  the  city  of  Chicago,  and  it  is  exactly  this  thing 
against  which  that  market  protests.  The  claim  advanced  by  the  traf- 
fic manager  of  the  Board  of  Trade  of  Chicago  in  a  great  variety  of 
forms  was  that  the  rail  line  east  of  Buffalo  should  charge  the  same  for 
the  further  transportation  of  lake  grain  as  for  rail  grain,  the  cost  of 
the  service  being  the  same.  Manifestly,  this  can  not  be  so  unless  rail 
carriers  from  Chicago  are  to  withdraw  from  this  competition  or  unless 
the  lines  west  of  Buffalo  will  sustain  the  entire  shrinkage,  giving  to 


364  ATLANTIC    PORT   DIFFERENTIALS 

their  connections  east  of  Buffalo  a  division  equivalent  to  the  local  from 
that  junction  point. 

This  Commission  has  uniformity  held  that  the  division  of  a  through 
rate  was  not  a  matter  of  concern  to  the  public,  and  that  while  it  might 
be  looked  to  for  certain  purposes  it  should  not  ordinarily  be  made  the 
[509]  standard  of  reasonableness  or  the  measure  of  discrimination. 
The  total  rate  is  the  thing  of  consequence,  not  the  manner  in  which 
that  charge  may  be  shared  among  the  different  parties  to  it ;  and  this 
could  hardly  be  better  illustrated  than  by  the  present  instance.  If 
lines  west  of  Buffalo  were  to  make  the  entire  shrinkage,  allowing  to 
lines  east  of  Buffalo  divisions  ecjuivalent  to  the  local  from  Buffalo,  this 
ground  of  complaint  would  be  removed,  but  the  complainant  would  be 
in  no  respect  benefited.  The  true  inquiry  is  whether,  upon  the  whole, 
there  be  an  unjust  discrimination,  and  we  are  hardly  prepared  to  find 
that  such  a  discrimination  does  of  necessit}'  arise  out  of  the  fact  that 
these  all-rail  carriers  insist  upon  meeting  the  lake-and-rail  rate. 

The  complainant  refers,  in  support  of  his  contention  that  the  ex-lake 
rate  from  Buffalo  ought  not  to  exceed  the  earnings  of  the  rail  line  be- 
yond Buffalo,  to  Bighee  d;  Warrior  llivers  Packet  Co.  v.  M.  &  0.  R.  li. 
Co.,  60  Fed.  Rep.  545. 

The  defendant  in  that  case  had  a  published  rate  of  80  cents  per  com- 
pressed bale  for  the  movement  of  cotton  from  Mobile  to  New  Orleans, 
and  the  relator  presented  400  bales  of  cotton  for  shipment  at  that  rate. 
The  defendant  declined  to  receive  it  for  less  than  $1.25  per  bale,  stat- 
ing as  a  reason  that  the  relator  was  a  water  carrier  which  had  brought 
this  cotton  from  Demopolis,  a  point  on  the  Bigbee  River,  to  Mobile, 
and  that  the  defendant  had  agreed  with  the  Louisville  &  Nashville 
Railroad  Company  and  other  rail  carriers  not  to  transport  cotton  reach- 
ing Mobile  by  water  from  points  on  Alabama  rivers  for  less  than  $1.25 
per  bale. 

The  court  held  that  this  agreement  was  in  violation  of  the  second 
and  third  sections  of  the  Act  to  Regulate  Commerce,  and  therefore  un- 
lawful, and  that  the  defendant  must  receive  and  transport  this  cotton 
for  its  established  rate  of  80  cents  per  bale. 

This  case  is  in  no  respect  an  authority  for  the  proposition  contended 
for  by  the  complainant.  Under  its  doctrine  there  might  be  some  ques- 
tion whether  the  defendants  could  apply  a  different  rate  to  ex-lake 
grain  from  the  established  local  rate  from  Buffalo,  although  the  case 
does  not  in  terms  so  hold,  but  it  goes  no  further.  If,  for  example, 
some  railroad  had  led  from  Demopolis  to  Mobile  and  that  railroad,  to- 
gether with  the  Mobile  &  Ohio,  had  established  a  joint  rate  on  cotton 
from  Demopolis  to  New  Orleans  under  which  the  Mobile  &  Ohio  re- 


CHICAGO  BOARD  TRADE  V.  A.  C.  R.  CO.,  ET  AL.  365 

ceived  for  its  division  a  less  sum  than  80  cents  per  bale,  this  would 
have  afforded  no  conclusive  reason  for  reducing  the  local  rate  of  80 
cents  from  IMobile  to  New  Orleans,  much  less  for  requiring  the  Mobile 
&  Ohio  to  transport  the  cotton  of  the  packet  company  for  the  amount 
of  its  division. 

In  the  Banner  Milling  case,  14  I.  C.  C.  Rep.  398,  we  considered  an 
advance  in  the  rate  on  flour  from  Buffalo  to  New  York  from  10  to  11 
cents,  and  from  Buffalo  to  Boston  and  New  England  points  from  12  to 
[510]  13  cents.  It  was  there  held  that  the  advance  was  unjustifiable, 
and  carriers  w^ere  ordered  to  restore  the  10-cent  rate.  This  case  rested 
largely  upon  the  fact  that  the  flour  to  which  the  advanced  rate  applied 
was  ground  from  grain  which  reached  Buffalo  by  water,  that  the  rate 
on  flour  from  Buffalo  had  been  advanced,  while  there  had  been  no  cor- 
responding advance  in  the  rate  paid  by  the  competitors  of  Buffalo, 
who  ground  flour  at  other  points  from  the  same  wheat. 

Subsequently,  in  the  Jennison  case,  18  I.  C.  C.  Rep.  113,  the  rates 
on  flour  from  JMinneapolis,  Duluth,  and  other  northwestern  points 
were  brought  to  the  attention  of  the  Commission,  the  claim  being  that 
those  rates  had  been  advanced  upon  the  Great  Lakes  until  the  rate 
charged  for  the  transportation  of  the  products  of  wheat  was  too  high 
in  comparison  with  that  charged  by  the  same  carriers  for  the  transpor- 
tation of  the  wheat  itself  from  the  western  lake  ports  to  Buffalo.  After 
an  exhaustive  examination  of  the  matters  involved  we  reached  the 
conclusion  that  this  claim  was  well  founded,  and  we  ordered  a  reduc- 
tion of  the  lake-and-rail  rate  on  flour  from  Duluth  to  the  Atlantic  sea- 
board. 

Thereupon  a  petition  for  rehearing  was  filed  in  both  the  Jennison 
case  and  the  Banner  Milling  case.  The  carriers  urged  with  great  ear- 
nestness and  produced  evidence  tending  to  show  that  to  reduce  the 
lake-and-rail  rate  as  proposed  in  the  Jennison  case  would  have  the  ef- 
fect of  reducing  all  flour  rates,  and  consequently  all  grain  rates 
throughout  the  West;  and  upon  a  further  consideration  of  the  whole 
question  we  w^ere  impressed  with  the  force  of  this  claim,  and  we  de- 
cided to  reconsider  our  first  conclusion  in  the  Banner  Milling  case  and 
to  allow  the  establishment  of  the  11-cent  rate  from  Buffalo  to  New 
York,  with  corresponding  advances  to  New  England  points. 

Ex-lake  rates  have  always  been  named  by  the  bushel,  while  local 
rates  from  Buffalo  are  named  in  cents  per  hundred  pounds.  The  pres- 
ent ex-lake  rates,  allowing  for  the  differences  which  would  arise  from 
this  method  of  stating  rates,  are  substantially  the  same  as  the  local 
rates  on  wheat  and  flour  from  Buffalo.  The  ex-lake  rate  on  wheat  to 
New  York,  for  example,  is  10.8  cents,  as  compared  with  11  cents  on 


366  ATLANTIC    PORT   DIFFERENTIALS 

flour,  while  the  ex-lake  rate  on  wheat  to  Boston  is  13.3  cents,  as  com- 
pared with  a  rate  of  13  cents  upon  flour.  It  did  not  appear  why  ex- 
lake  rates  might  not  be  stated  in  cents  per  hundred  pounds,  nor  why 
they  might  not  well  be  exactly  the  same  as  the  local  rates  from  Buffalo, 
instead  of  being,  as  at  present,  slightly  lower  in  some  cases  and  slightly 
higher  in  others;  but  no  question  was  made  upon  this  ground. 

As  already  observed  and  as  fully  stated  in  the  Banner  Milling  case, 
flour  ground  at  Buffalo  is  almost  entirely  from  wheat  received  ex-lake 
at  that  port.  It  is  difficult  to  see  how  this  Commission,  if  it  is  to  main- 
tain the  parity  of  rate  between  wheat  and  flour  which  generally  [511] 
prevails,  upon  the  strength  of  which  mills  have  been  erected  at  Buf- 
falo and  throughout  all  parts  of  the  United  States,  and  which  has  been 
generally  approved  by  this  Commission,  could  enforce  or  even  i)ermit 
the  charging  of  a  rate  upon  grain  from  Buffalo  materially  lower  than 
the  rate  upon  the  flour  manufactured  at  Buffalo  from  that  grain.  To 
sustain  the  contention  of  the  complainants  would  require  us  to  estab- 
lish rates  on  wheat  from  Buffalo  from  3  to  5  cents  per  100  pounds  less 
than  the  present  flour  rates.  The  effect  of  such  a  rate  ad.justment 
would  be  not  onl}'  to  injure  the  mills  at  Buffalo  but  to  seriously  affect 
those  at  all  western  points.  While  there  is  very  great  force  in  the  con- 
tention of  the  complainant,  we  feel  that,  upon  a  view  of  the  entire 
situation,  it  can  not  be  accepted.  If  this  rate  from  Buffalo  were  un- 
reasonably high,  so  that  the  cost  of  transporting  grain  or  grain  prod- 
ucts from  the  western  point  of  origin  via  the  Great  Lakes  to  the  eastern 
point  of  cojisumption  was  unreasonably  high,  it  woidd  be  our  clear 
duty  to  reduce  this  rate ;  but  where  it  is  practically  admitted  that  the 
transportation  charge  is  not  excessive,  and  where  we  are  asked  to  take 
this  action  simply  because  more  grain  would  thereby  flow  through  a 
particular  grain  market,  we  are  at -liberty,  in  just  consideration  of  all 
interest,  to  decline  to  interfere  with  the  present  arrangement,  which  is, 
in  the  main  satisfactory. 

Ex-lake  rates  were  in  fact  for  many  years  lower  than  corresponding 
local  rates  from  Buffalo,  and  the  complainants  point  to  this  as  the  most 
conclusive  evidence  that  the  maintenance  of  lower  ex-lake  rates  to-day 
would  not  break  down  the  rate  structure.  But  it  must  be  remem- 
bered that  until  about  the  time  when  these  rates  became  substantially 
what  they  now  are  the  published  tariff  was  not  observed,  and  that  this 
was  especially  true  of  highly  competitive  business,  like  grain  and  grain 
products,  where  the  rate  was  of  vital  importance. 

It  should  also  be  noted  that  Buffalo  millers  have  always  insisted  that 
the  charging  of  a  lower  rate  upon  ex-lake  wheat  than  upon  the  flour 
ground  from  that  wheat  was  a  discrimination  against  Buffalo.     Now 


CHICAGO  BOARD  TRADE  V.  A.  C.  R.  CO.,  ET  AL.  367 

that  published  rates  are  actually  observed,  and  that  the  margin  of 
profit  tends  to  decrease  rather  than  increase,  we  can  not  assume  that 
any  locality  can  grind  flour  under  a  permanent  rate  disability.  To 
make  the  rate  on  ex-lake  wheat  to  New  York  City  materially  lower 
than  the  rate  on  flour  from  Buffalo  would  inevitably  throw  the  grind- 
ing of  flour  consumed  in  the  city  of  New  York  and  that  vicinity  to  the 
seaboard. 

EXPORT  RATES. 

In  former  years  the  United  States  has  been  a  large  exporter  of  wheat 
and  other  grains.  This  grain  has  been  produced  in  the  middle  west, 
from  which  it  might  reach  the  foreign  destination  either  by  way  of  the 
[512]  Gulf  ports  like  New  Orleans  and  Galveston  or  by  way  of  the 
North  Atlantic  ports.  The  cost  of  the  transportation  has  usually  de- 
termined the  route  which  the  traffic  would  take. 

Lower  export  rates  have  generally'  been  maintained  through  all  the 
ports  than  the  corresponding  domestic  rates,  and  the  rail  export  rates 
through  the  North  Atlantic  ports  from  IMontreal  on  the  north  to  Nor- 
folk on  the  south  have  borne  a  certain  relation  to  one  another,  the  rate 
to  New  York  being  somewhat  higher  than  to  the  various  outports,  so 
called,  except  Boston,  for  the  reason  that  the  shipping  facilities  of  New 
York  are  superior  and  the  water  rate  from  that  port  somewhat  lower 
than  from  the  others. 

During  the  season  of  navigation  export  grain  moves  largely  via  the 
Great  Lakes.  From  the  lakes  to  the  port  of  export  there  have  been 
in  the  past  three  possible  routes:  First,  all  water  via  the  Welland 
Canal  and  the  St.  Lawrence  River  to  Montreal;  second,  all  water  via 
the  Erie  Canal  and  the  Hudson  River  to  New  York;  third,  from  one 
of  the  eastern  lake  ports,  of  which  Buffalo  is  the  principal,  liy  rail  to 
the  port  of  export  from  Baltimore  upon  the  south  to  IMontreal  upon 
the  north.  The  rail  rate  from  Buffalo  to  New  York  has  furnished  the 
standard  for  rail  rates  from  all  other  lake  ports  to  all  ports  of  export. 

Below  is  given  a  table  showing,  since  1889,  ex-lake  and  local  rates 
upon  wheat  from  Buffalo  to  New  York,  both  export  and  domestic,  and 
also  from  Chicago  to  New  York : 


368 


ATLANTIC    PORT   DIFFERENTIALS 


Year. 


Buffalo  to  New  York. 


Local. 


Eate  per 
100  pounds. 


Ex-lake. 


Eate  per  bushel. 


Domestic. 


Export. 


Chicago  to  New  York. 


Rate  per  100  2:>ounds. 


Domestic.         Export. 


Cents. 

Cents. 

Cents. 

Cents. 

Cents. 

1889 

13 

6V2 

6 1/2 

25 

25 

1890 

13 

5% 

5% 

22  lA 

22% 

1891   

13 

51/2 

51/2 

25 

25 

1892  

13 
13 

41/2 
6 

41/2 
6 

25 
25 

25 

1893  

25 

1894   

11 
13 
11 

5 
5 
5 

5 
5 
5 

20 
20 
20 

20 

1895   

20 

1896   

20 

1897   

11 
11 

5 
5 

5 
5 

20 
20 

20 

1898 

20 

1899  

11 

5 

5 

17 

12 

1900  

9 

5 

5 

15 

13  y2 

1901   

10 

5 

5 

171/2 

16 

1902  

10 

5 

5 

17  y2 

13  y2 

1903   

loyo 

6 

0 

18 

14 

1904 

10 

6 

4 

17  Va 

13% 

1905 

10 

4i'o 

41/0 

17 1^ 

13% 

1906   

10 

5 

5 

i7y2 

13  y2 

1907 

11 

6 

6 

17^ 
16 

13 

1908  

11 

61/2 

51/2 

13 

1909 

10 

eV2 

5y2 

16 

13 

1910 

10 

6% 

51/. 

16 

13 

1911 

11 

6 1/2 

5Vj 

16 

13 

[513]  The  foregoing  table  docs  not  purport  to  give  all  the  published 
rates  which  have  been  in  effect  during  the  period  covered,  but  only  what 
may  be  termed  the  prevailing  rate  for  each  year.  In  case  of  the  ex- 
lake  rate  reference  has  been  had  to  the  season  of  open  navigation  only 
for  the  purpose  of  determining  what  was  the  prevailing  rate. 

It  should  also  be  noted  that  until  recently  grain  has  not  moved  from 
Chicago  to  the  seaboard  upon  the  published  rate,  but  rather  under  a 
transit  privilege  upon  a  balance  of  some  through  rate.  At  the  pres- 
ent time  there  is  in  effect  from  Chicago  what  is  known  as  a  "  reship- 
ping"  rate,  which  applies  to  all  grain  loaded  at  Chicago,  with  the  ex- 
ception of  certain  instances  where  the  transit  rate  still  applies.  The 
published  rate  from  Chicago  is  therefore  to-day,  both  export  and  do- 
mestic, the  rate  which  actually  moves  the  traffic,  and  we  have,  for  the 
first  time,  in  the  published  tariff  a  statement  of  the  actual  rates  of 
various  kinds  from  Buffalo  and  Chicago. 

It  should  further  be  noted  that  until  recently  the  published  rate  has 
not  been  maintained.  The  published  ex-lake  rate  from  Buffalo,  for 
example,  never  fell  for  any  considerable  time  below  4  cents  per  bushel 


CHICAGO  BOARD  TRADE  V.  A.  C.  R.  CO.,  ET  AL.  369 

on  wheat,  but  we  know  from  investigations  conducted  by  this  Commis- 
sion that  the  actual  rate,  especially  as  applied  to  the  export  movement, 
fell  as  low  as  2.75  cents  per  bushel,  and  did  not  probably  average  for 
the  entire  season  much  in  excess  of  3  cents. 

It  will  be  seen  from  an  examination  of  the  above  table  that  while 
there  were  temporary  differences  between  export  and  domestic  in  the 
ex-lake  rate  before  1908,  there  was  no  settled  practice  until  that  year 
by  which  a  different  rate  was  applied.  During  that  season  of  naviga- 
tion and  since  the  export  rate  has  been  uniformly  1  cent  below  the  do- 
mestic. 

When  it  is  remembered  that,  as  a  rule,  the  published  export  rate  had, 
previous  to  1908,  never  exceeded  5  cents  per  bushel ;  that  it  had  some- 
times been  as  low  as  4  cents,  and  that  the  actual  rate  had  been  less  than 
the  published  rate,  it  will  be  seen  that  the  cost  of  transporting  export 
wheat  from  Buffalo  to  New  York  is  very  materially  greater  to-day  than 
in  the  past. 

It  has  been  already  noted  that  grain  afloat  upon  the  Great  Lakes 
may  move  all-water  to  Montreal.  It  was  stated  in  the  course  of  this 
hearing  that  at  the  present  time  ships  carrying  80,000  bushels  of  wheat 
could  load  at  the  dock  in  Chicago  and  unload  at  the  dock  in  Blontreal, 
and  that  the  rate  of  transportation  via  this  water  route  did  not  exceed 
3.5  cents  per  bushel. 

Grain  afloat  may  reach  New  York  via  the  Erie  Canal,  and  this  for- 
merly was  a  most  important  factor  in  the  grain-rate  situation,  since  the 
cost  of  transportation  to  New  York  Harbor  was  largely  determined  by 
the  cost  of  carriage  from  Buffalo  via  the  Erie  Canal,  which  fixed  the 
[514]  rail  rate  to  New  York  and  thus  in  fact  made  the  rate  to  all  other 
ports.  At  the  present  time  the  Erie  Canal  for  practical  purposes  is 
out  of  commission.  The  state  is  expending  a  large  sum  of  money  in 
the  improvement  of  that  waterway  with  a  view  to  making  possible  the 
use  of  very  much  larger  barges  than  can  at  the  present  time  be  em- 
ployed and  thereby  cheapening  the  cost  of  transportation.  Pending 
these  improvements  which  are  now  in  progress  no  one  will  buy  equip- 
ment of  the  type  which  can  now  be  used,  since  within  a  few  years  that 
must  become  entirely  obsolete,  and  the  present  equipment  is  insufficient 
to  provide  any  substantial  competition  by  that  route.  It  seems  proba- 
ble that  this  decline  in  competition  via  the  Erie  Canal  is  largely  re- 
sponsible for  the  increase  in  ex-lake  rates,  both  export  and  domestic. 

The  New  York  Produce  Exchange  claims  that  the  effect  of  recent 

increases  in  ex-lake  export  rates,  taken  in  connection  with  the  all-water 

route  to  Montreal,  which  has  been  developed  largely  within  the  last 

few  years,  has  been  to  so  cheapen  the  cost  of  handling  grain  through 

24 


370 


ATLANTIC    PORT    DIFFERENTIALS 


]\Iontreal  as  compared  with  New  York  that  the  export  business  is  leav- 
ing the  port  of  New  York  for  the  port  of  jMontreal,  and  that  in  the 
very  near  future  the  export  grain  movement  through  New  York  will 
be  reduced  to  a  practical  nullity.  In  evidence  of  this  it  introduces 
certain  tables  showing  the  comparative  movement  through  these  ports 
in  recent  years.  The  following  table  gives  the  percentage  of  total 
wheat  exports  through  the  ports  named  for  the  years  named : 

Fercentage  of  total  exports. 


Year. 


Montreal.    !  New  York. 


Boston. 


Philadel- 
phia. 


Baltimore. 


1902 
1906 
1907 
1908 
1909 
IPIO 


28.36 
33.34 
30.99 
43.38 
52.34 
54.16 


28.69 
30.57 
30.57 
23.09 
19.35 
15.98 


12.33 

14.52 

13.30 

6.62 

9.78 

8.47 


11.46 

12.59 

9.44 

9.88 

14.56 

10.02 

14.03 

11.83 

11.41 

6.89 

10.73 

10.66 

The  table  below  gives  the  total  number  of  bushels  handled  for  the 
same  years  through  New  York  and  Montreal,  with  the  percentages  for 
each  year : 


Year. 

Quantity  in   bushels. 

Percentage. 

New  York. 

Montreal.             Total. 

New  York 

Montreal. 

1902 

17,085,718 
12,691,701 
17,875,700 
16,211,918 
9,247,913 
6,026,421 

16,888,505 
13,842,586 
18,122,009 
30,461,347 
25,031,635 
20,420,034 

33,974,223 
26,534,287 
35.997,709 
46,673,265 
34,279,548 
26,446,455 

50.28 
47.83 
49.66 
34.74 
27.00 
22.79 

49.72 
52.17 
50.34 
65.26 
73.00 
77.29 

1906   

1907   

1908   

1909   

1910   

[515]  The  exports  of  wheat  grown  in  the  United  States  are  decreas- 
ing, owing  to  the  fact  that  our  home  consumption  is  steadily  increas- 
ing. Upon  the  other  hand,  the  Canadian  northwest  is  developing  an 
enormous  wheat  acreage,  which  is  increasing  rapidly  the  quantity  of 
wheat  exported  from  Canada.  Tt  is  urged  that  the  location  of  this 
wheat  is  such  that  it  should  naturally  move  out  through  ^Montreal  and 
not  through  an  American  port  of  export.  As  bearing  upon  this  sug- 
gestion the  following  tables  are  given  showing  exports  of  wheat  grown 
m  the  United  States  and  also  wheat  grown  in  Canada  through  the 
ports  of  New  York  and  Montreal.  In  examining  these  tables  it  should 
be  borne  in  mind  that  during  the  year  1910  there  was  in  effect  through 


CHICAGO  BOARD  TRADE  V.  A.  C.  R.  CO.,  ET  AL. 


371 


New  York  an  export  rate  of  4  cents  per  bushel  from  Buffalo  applicable 
to  Canadian  wheat  in  bond,  but  not  to  American  wheat. 

Wheat  grown  in  the  United  States. 


Year. 


Quantity  in  bushels 
exported  from — 


Percentage. 


New  York.       Montreal.     New  York. 


Montreal. 


1906 
1907 
1908 
1909 
1910 


10,454,682 

15,252,783 

13,902,028 

7,411,214 

1,303,696 


949,155 

4,774,267 

10,908,195 

10,731,498 

3,882,885 


91.7 
76.2 
56.1 
40.9 
25.1 


8.3 
23.8 
43.9 
59.1 
74.9 


Wheat  grown  in  Canada. 


Years, 

Quantity  in  bushels 
exported  from — 

Percentage. 

New  York.        Montreal. 

New  York,  i     ^Montreal. 

1906    

I{t07                   

2,237,019 
2,622,917 
2,309,890- 
1,836,699 
4,732.725 

12,893,431 
13,347,742 
19,553,152 
14,300,137 
16,537,149 

14.8 
16.4 
10.6 
11.4 
22.3 

85.2 
83.6 

1908    

1909    

89.4 

88.6 

1910    

77.7 

It  is  impossible  to  study  the  figures  in  the  foregoing  tables  without 
the  conviction  that  the  trend  of  the  export  wheat  business,  even  in 
wheat  produced  in  the  United  States,  is  steadily  from  American  ports 
to  Montreal,  and  it  is  impossible  to  attribute  this  to  any  other  cause 
than  the  inland  rate  of  transportation. 

In  every  respect,  except  the  cost  of  carriage  to  the  port  of  export, 
New  York  has  the  advantage  of  Montreal.  Montreal  is  a  winter  port, 
not  available  during  several  months  of  the  year.  At  all  times  in  the 
year  the  cost  of  insurance  from  that  port  is  much  higher  than  from 
New  York,  owing  to  the  perils  of  navigation  upon  the  River  St.  Law- 
rence. The  shipping  facilities  of  New  York  are  much  better  than 
IMontreal.  New  York  reaches  many  points  of  consumption  to  which 
[516]  there  is  no  direct  service  from  Montreal,  and  the  rate  of  trans- 
portation itself  is  usually  lower  from  New  York. 

In  addition  to  transportation  facilities  New  York  is  a  great  grain 
market,  with  large  elevator  capacity,  where  wheat  can  l)e  stored  dur- 
ing the  period  of  lake  navigation  for  export  later  in  the  season.  All 
these  circumstances,  say  the  New  York  grain  interests,  shouUl  give  to 


372  ATLANTIC    PORT   DIFFERENTIALS 

that  port  a  large  part  of  the  export  business.  They  have  therefore 
earnestly  appealed  to  the  carriers  to  establish  a  rate  which  will  permit 
them  to  handle  a  portion  of  that  traffic,  and  not  succeeding  in  that 
quarter  have  now  come  to  this  Commission  with  the  same  prayer. 

So  far  as  the  case  of  the  complainant  can  be  established  by  showing 
the  necessity  for  the  rate  demanded  the  case  of  this  complainant  has 
been  made  out.  We  are  impressed  with  the  thought  that  New  York 
can  not  permanently  retain  its  export  grain  business  in  anything  like 
the  same  relative  volume  as  in  years  gone  by  upon  the  present  adjust- 
ment of  rates.  It  asks  that  the  carriers  establish,  during  the  period  of 
navigation,  a  rate  of  4  cents  per  bushel  from  Buffalo.  Whether  this 
rate  would  enable  New  York  to  hold  its  own  as  against  Montreal  is 
doubtful,  but  it  would  certainly  be  much  preferable  to  the  present  rate 
of  5.5  cents. 

The  carriers  decline  to  accede  to  this  request  for  two  reasons. 

They  say  that  4  cents  per  bushel  is  not  a  remunerative  rate,  and 
that  they  prefer  to  allow  the  business  to  go  elsewhere  rather  than  estab- 
lish this  rate. 

The  ex-lake  rate  includes  elevation  at  Buffalo;  that  is,  the  cost  of 
transferring  the  grain  from  the  vessel  to  the  elevator  and  from  the 
elevator  to  the  car,  for  which  a  uniform  allowance  of  one-half  cent  per 
bushel  is  made  by  the  carrier  to  the  elevator.  This  leaves  for  the  rate 
of  transportation  3.5  cents  per  bushel. 

The  rate  also  includes  at  the  city  of  New  York  a  delivery  alongside 
the  ship.  At  New  York  grain  is  not  loaded  from  the  elevator  into  the 
vessel  as  it  is  at  most  other  ports,  but  is  barged  from  the  car  to  the  ship, 
into  the  hold  of  which  it  is  transferred  by  a  floating  elevator.  The 
testimony  indicates  that  this  additional  service  costs  from  one-half  cent 
to  1  cent  per  bushel,  and  the  carriers  insist  that  this  is  an  extraordi- 
nary item  which  should  also  be  deducted  from  tiie  rate  before  the  real 
transportation  charge  is  reached.  If  it  be  assumed  that  the  cost  of 
lighterage  in  New  York  Harbor  is  one-half  cent  per  bushel,  we  have 
left  for  the  transportation  charge  proper,  from  Buffalo  to  New  York, 
3  cents  per  bushel,  equivalent  to  5  cents  per  100  pounds,  and  yielding, 
for  a  distance  of  something  over  400  miles,  a  return  of  2.5  mills  per 
ton-mile,  which  is,  upon  its  face,  an  extremely  low  rate  of  transporta- 
tion. 

The  complainants  urge  that  this  export  wheat  is  moved  in  large  lots 
from  Buffalo  to  New  York — usually  in  trainloads — to  which  the  [517] 
carriers  reply  that  this  is  not  an  advantage  but  rather  a  disadvantage, 
since  they  are  obliged  to  provide  facilities  for  the  handling  of  this 
traffic  at  a  particular  time  in  order  that  connection  may  be  made  with 


CHICAGO  BOARD  TRADE  V.  A.  C.  R.  CO.,  ET  AL.  373 

the  exporting  vessel.  This  necessitates  the  parking  of  ears  at  Buffalo 
and  the  handling  of  an  unusual  amount  of  traffic  which  may  interfere 
with  their  other  business. 

The  average  carload  of  wheat  is  about  1,000  bushels,  jdelding,  at  3 
cents  a  bushel,  $30  per  car.  Fifty  cars  can  be  moved  in  a  train  from 
Buffalo  to  New  York  by  most  routes,  amounting,  per  traiuload,  to 
$1,500.  The  mere  cost  of  moving  that  train  is  much  less  than  this 
amount.  If  no  account  be  made  therefore  of  the  expenses  other  than 
those  of  the  movement,  there  is  a  profit. 

The  complainants  point  to  the  fact  that  in  former  years  the  published 
rate  was  but  4  cents  per  bushel  and  that  carriers  often  accepted  as 
low  as  2%  cents  per  bushel  for  handling  this  business.  They  further 
suggest  that  while  the  rate  of  4  cents  was  in  effect  in  1908,  applicable 
to  all  wheat,  and  in  1910,  applicable  to  Canadian-grown  wheat,  these 
defendants  were  anxiously  soliciting  the  business. 

It  should  also  be  noted  that  if  lighterage  in  New  York  Harbor  be 
disregarded  the  carrier  of  ex-lake  grain  from  Buffalo  would  receive, 
at  4  cents  per  bushel,  31/0  cents  after  deducting  elevation  at  Buffalo, 
and  that  this  is  slightly  in  excess  of  its  division  of  the  present  export 
rate  of  13  cents  from  Chicago,  which  the  carrier  voluntarily  makes  for 
the  purpose  of  participating  in  that  business. 

It  seems  probable  that  4  cents  per  bushel  yields,  "all  things  consid- 
ered, a  substantial  profit  over  the  cost  of  the  movement.  If  the  carrier 
has  surplus  facilities  not  otherwise  demanded,  it  would  find  business 
upon  that  rate  to  its  advantage;  it  may  be  doubted  whether  additional 
facilities  could  be  provided  for  the  handling  of  this  traffic  at  that 
figure. 

The  real  reason  why  these  defendants  decline  to  accede  to  the  request 
of  the  New  York  interests  for  the  4-cent  export  rate  seems  to  be  the 
fear  upon  their  part  that  the  result  of  complying  with  that  request 
would  be  to  disorganize  the  general  rate  structure  upon  grain  and 
grain  products  from  the  West  to  Atlantic  seaboard  territory. 

In  1908  the  defendants,  upon  the  insistent  request  of  the  New  York 
grain  interests,  did  establish  and  maintain,  for  57  days,  an  export  rate 
of  4  cents  per  bushel.  This  rate  was  withdrawn  because  the  defend- 
ants believed  that  its  continuance  would  result  in  a  reduction  of  the 
rates  from  the  west  upon  grain  and  grain  products.  During  the  sea- 
son of  1910  a  rate  of  4  cents  was  applied  to  the  movement  of  Canadian 
grain  in  bond,  but  the  defendants  are  satisfied  that  no  distinction  can 
be  maintained  between  Canadian  and  American  wheat  and,  therefore, 
upon  a  view  of  the  entire  situation,  have  declined  to  restore  the  4-cent 
rate. 


374  ATLANTIC    PORT    DIFFERENTIALS 

[518]  The  difference  between  the  domestic  and  export  rate  from 
Chicago  at  the  present  time  is  3  cents  per  100  pounds.  The  difference 
between  the  export  and  the  domestic  rates,  ex-lake,  at  the  present  time 
is  1  cent  per  bushel,  or  six-tenths  of  a  cent  per  100  pounds.  It  will  be 
seen,  therefore,  that  the  difference  in  export  rates  where  the  wheat 
moves  by  the  Great  Lakes  from  Chicago  is  much  less  than  the  difference 
where  it  moves  all  rail.  At  4  cents  per  bushel  the  difference  would 
still  be  in  favor  of  the  all-rail  route. 

American  millers  insist  that  to  make  a  rate  of  4  cents  on  wheat  with- 
out a  corresponding  rate  upon  the  product  of  wheat  is  to  discriminate 
against  the  home  miller  in  favor  of  his  foreign  competitor.  It  can  not 
l)e  denied  that  the  result  of  making  a  lower  transportation  charge  on 
the  wheat  than  upon  the  flour  to  foreign  destination  does  operate  in 
favor  of  the  foreign  miller,  but  it  must  also  be  recognized  that  the 
cost  of  transporting  wheat  by  water  is  less  than  the  cost  of  transport- 
ing flour  by  water,  and  that  wheat  will  move  to  the  foreign  consumer 
in  the  form  of  wheat  cheaper  than  it  can  be  moved  in  the  form  of  flour, 
unless  the  Government  sees  fit  to  make  an  arbitrary  rule  that  whatever 
carrier  transports  wheat  at  a  certain  price  shall  carry  flour  at  the  same 
price,  which  is  not  suggested.  This  wheat  will  move  abroad  through 
the  port  of  IMontreal  if  it  does  not  move  through  the  port  of  New  York, 
and  it  is  doubtful  whether  the  claim  of  the  miller  and  of  the  western 
railroad  that  the  effect  of  this  4-cent  ex-lake  export  rate  would  be  dis- 
criminatory toward  them  is  well  taken.  It  would  not  materially  in- 
crease the  amount  of  wheat  which  will  be  exported;  it  would  simply 
determine  whether  that  wheat  should  flow  through  an  American  or  a 
Canadian  port  of  export. 

We  are  inclined  to  think  that,  under  all  the  circumstances,  these  car- 
riers might  well  establish,  during  the  period  of  navigation,  a  4-cent 
ex-lake  export  rate  upon  wheat  and  corresponding  rates  upon  other 
grain,  but  the  rate  itself  is  so  low,  the  margin  over  and  above  the  cost 
of  operation  is  so  narrow,  that  we  do  not  feel  warranted  in  making 
this  requirement.  Whether  it  shall  be  established  is  a  matter  of  policy 
which  must  be  left  to  the  carriers  themselves,  and  not  a  matter  of  right 
which  may  be  demanded  by  the  port  of  New  York.  When  the  improve- 
ments in  progress  upon  the  Erie  Canal  are  completed  that  waterway 
will  undoubtedly  determine  the  rate  at  which  grain  shall  be  carried 
from  Buffalo  to  tidewater. 

The  grain  interests  of  the  city  of  Baltimore  have  intervened  in  this 
])roceeding.  They  join  with  the  New  York  Produce  Exchange  in  ask- 
ing that  a  4-cent  rate  be  established  from  Buffalo  to  New  York,  but 


CHICAGO  BOARD  TRADE  V.  A.  C.  R.  CO.,  ET  AL.  375 

they  insist  that  the  differential  in  favor  of  Baltimore  wliich  now  exists 
upon  this  ex-lake  business  should  be  wider. 

Some  years  ago  railroads  transporting  ex-lake  grain  from  eastern 
lake  ports  to  Baltimore,  Philadelphia,  New  York,  and  Boston  became 
[519]  involved  in  a  controversy  as  to  the  relative  rate  upon  which  that 
traffic  should  be  handled  to  the  various  ports,  which  resulted  in  a  seri- 
ous rate  war.  The  question  was  finally  submitted  to  this  Commission, 
which,  after  careful  consideration,  expressed  the  opinion  that  a  differ- 
ential of  three-tenths  of  a  cent  per  bushel  should  be  allowed  Baltimore 
upon  this  traffic.  11  I.  C.  C.  Rep.  13  {ante,  p.  283).  The  city  of  Balti- 
more now  shows  that  under  this  differential  no  ex-lake  grain  moves 
through  the  port  of  Baltimore,  and  it  asks  that  whatever  the  rate  may 
be  the  differential  in  favor  of  that  port  be  increased. 

All  the  ports  interested  were  parties  to  the  proceeding  by  which  that 
differential  was  originally  fixed,  and  all  are  interested  in  any  change 
in  the  differential.  We  do  not  feel  that  we  ought  to  reconsider  the 
conclusion  then  reached,  except  upon  some  proceeding  to  which  all 
these  ports  are  parties,  and  in  which  a  thorough  reinvestigation  of  the 
whole  subject  is  made.  It  was  stated  upon  this  hearing  that  the  port 
of  New  York  was  also  dissatisfied  with  the  conclusion  reached  by  the 
Commission  touching  these  port  differentials,  and  that  a  complaint  was 
now  being  prepared  by  the  New  York  Produce  Exchange  which  would 
present  the  subject  anew.  However  that  may  be,  the  intervening  peti- 
tion of  the  city  of  Baltimore  will  be  at  this  time  dismissed  without 
prejudice  to  the  right  of  that  locality  to  urge,  in  some  subsequent  pro- 
ceeding, the  ground  taken  here. 

The  petitions  in  both  the  cases  are  also  dismissed. 


I 


CHAMBER  OF  COMMERCE  OP  THE  STATE  OF  NEW  YORK, 

ET  AL., 

■V. 

NEW  YORK  CENTRAL  &  HUDSON  RIVER  RAILROAD  COM- 
PANY, ET  AL. 

24  I.  C.  C.  55. 


377 


CHAMBER  OF  COMMERCE  OF  THE  STATE  OF  NEW  YORK,  ET  AL., 

V. 

NEW   YORK   CENTRAL   &  HUDSON   RIVER   RAILROAD   COMPANY,   ET   AL. 

(24  I.   C.  C.  55.) 

Decided  June  4,  1912. 

\.  Differentials  under  New  York  on  all-rail  and  lake-and-rail  export  shipments 
from  differential  territory  to  Baltimore  should  not  exceed  3  cents  per  100 
pounds,  and  to  Philadelphia  should  not  exceed  2  cents  per  100  pounds,  on  the 
classes  and  on  commodities  other  than  grain.  On  all-rail  and  lake-and-rail 
export  shipments  of  grain  the  differentials  under  New  York  should  not  exceed 
1.5  cents  per  100  pounds  to  Baltimore,  and  1  cent  per  100  pounds  to  Philadel- 
phia. 

2.  As  to  all  this  traffic  the  export  rates  to  Boston  should  not  be  lower  than  to  New 
York. 

3.  The  differentials  under  New  York  from  Buffalo,  N.  Y.,  Erie,  Pa.,  and  West 
Fairport,  Ohio,  to  Baltimore  and  Philadelphia,  on  ex-lake  grain  from  differ- 
ential territory  for  export,  should  not  exceed  two-tentlis  of  1  cent  per  bushel 
on  barley  and  oats,  and  three-tenths  of  1  cent  per  bushel  on  wheat,  corn,  and 
rye. 

4.  Differentials  under  New  York  on  import  traffic,  all-rail  and  lake-and-rail,  from 
Philadelphia  and  Baltimore  to  differential  territory  should  be  no  greater  than 
those  which  existed  in  the  latter  part  of  1908. 

5.  Import  rates  from  Boston  should  not  be  lower  than  from  New  York. 

Benjamin  L.  Fairchild  for  complainants. 

Clyde  Brown  for  New  York  Central  &  Hudson  River  Railroad  Com- 
pany. 

George  Stuart  Patterson  for  Pennsylvania  Railroad  Company. 

W.  Irvine  Cross  for  Baltimore  &  Ohio  Railroad  Company. 

Charles  S.  Hamlin  for  Boston  &  Maine  Railroad. 

Thomas  Carmodu  and  Henry  S  eld  en  Bacon  for  state  of  New  York. 

John  T.  O'Brien  and  Archibald  R.  Watson  for  city  of  New  York. 

William  M.  Coates  for  Philadelphia  trade  bodies. 

Frank  L.  Ncall  for  city  of  Philadelphia. 

Harry  E.  Belles  for  United  Businessmen's  Association  of  Philadel- 
phia. 

Philip  Godley  and  E.  J.  Lavino  for  Philadelphia  Board  of  Trade. 

James  Collins  Jones  for  Philadelphia  Board  of  Trade,  Philadelphia 
Chamber  of  Commerce,  Commercial  Exchange  of  Philadelphia,  and 
Philadelphia  Maritime  Exchange. 

James  L.  King  for  Commercial  Exchange  of  Philadelphia. 

[56]  P.  D.  Todd  and  P.  F.  Young  for  Philadelphia  Maritime  Ex- 
change, 

N.  B.  Kelly  for  Philadelphia  Chamber  of  Commerce. 

379 


380  ATLANTIC    PORT   DIFFERENTIALS 

Robert  Ramsay  for  commercial  bodies  of  Baltimore. 

Arthur  Geo.  Brown  and  John  B.  Daish  for  Baltimore  Chamber  of 
Commerce  and  Board  of  Trade  of  the  City  of  Baltimore. 

Ottmar  Marcus  for  Old  Town  Merchants  &  Manufacturers '  Associa- 
tion of  Baltimore. 

Andrew  C.  Trippe  and  James  McC.  Trippe  for  Merchants  &  Manu- 
facturers '  Association  of  Baltimore. 

S.  S.  Field  for  mayor  and  city  council  of  Baltimore. 

Edgar  Allen  Poe  for  state  of  Maryland. 

Herbert  Sheridan  for  Baltimore  Chamber  of  Commerce. 

Charles  S.  Hamlin  and  D.  0.  Ives  for  Boston  Chamber  of  Commerce. 

James  M.  Swift  for  commonwealth  of  Massachusetts. 

H.  C.  Barlow  for  Chicago  Association  of  Commerce. 

John  C.  Howard  for  S.  E.  Comstock  &  Company. 

REPORT  OP  THE  COMMISSION, 

Clark,  Commissioner: 

Complainants  are  associations  of  merchants  located  in  the  citj'  of 
New  York,  organized  for  the  purpose  of  fostering  and  furthering  the 
interests  of  their  respective  lines  of  business  and  the  commercial  inter- 
ests of  the  state  and  city  of  New  York. 

The  complaint  alleges  that  defendants  maintain  rates,  charges,  dif- 
ferentials, rules,  and  regulations  to  and  from  the  city  and  port  of  New 
York,  which  are  unjust  and  unreasonable  in  themselves,  and  relatively 
so  as  compared  with  competitive  ports,  more  particularly  Philadelphia, 
Baltimore,  Newport  News,  Norfolk,  and  Boston.  As  presented  on 
hearing,  brief,  and  argument,  the  issue  is  the  inland  charges  on  import 
and  export  traffic  having  destination  or  origin  in  so-called  "differential 
territory."  That  territory  is  bounded  on  the  north  by  the  great  lakes 
and  a  line  drawn  west  from  Chicago,  111.,  to  Dubuque,  Iowa ;  on  the 
east  by  a  line  drawn  from  Pittsburgh,  Pa.,  to  Buffalo,  N.  Y, ;  on  the 
south  by  the  Ohio  River,  and  on  the  west  by  the  Mississippi  River. 

Complainants  allege  that  higher  rates  to  and  from  New  York  on  this 
traffic  than  are  contemporaneously  charged  to  and  from  Boston,  Phila- 
delphia, and  Baltimore,  are  unjustly  discriminatory  against  New  York 
and  unduly  preferential  to  Boston,  Philadelphia,  and  Baltimore. 

Norfolk  and  Newport  News,  Va.,  were  named  in  the  complaint,  but 
practically  no  attention  was  paid  to  them  in  the  trial. 

The  Maritime  Association  of  the  port  of  New  York,  the  city  of  New- 
York  by  its  corporation  counsel,  and  the  state  of  New  York  by  its  at- 
torney general,  intervened  in  support  of  the  complaint. 


CHAMBER  OP  COMMERCE  OF  N.  Y.  V.  N.  Y.  C.  &  H.  R.  R.  CO.,  ET  AL.       381 

[57]  The  Boston  Chamber  of  Commerce,  the  directors  of  the  port  of 
Boston,  and  the  commonwealth  of  Massachusetts  through  its  attorney 
general  intervened  asking  affirmative  relief,  and  that  the  rates  to  and 
from  Baston  be  made  no  higher  than  to  and  from  Baltimore. 

The  Baltimore  Chamber  of  Commerce,  the  Board  of  Trade  of  the 
city  of  Baltimore,  the  maj^or  and  city  council  of  Baltimore  through 
the  city  solicitor,  the  state  of  Maryland  by  its  attorney  general,  the 
Philadelphia  Board  of  Trade,  the  Philadelphia  Chamber  of  Commerce, 
the  Commercial  Exchange  of  Philadelphia,  the  Philadelphia  Maritime 
Exchange,  and  the  city  of  Philadelphia  b.y  its  mayor  intervened  in  op- 
position to  the  complaint  and  in  favor  of  maintenance  of  the  former 
relative  adjustment. 

The  burden  of  the  defense  has  been  borne  by  the  Pennsylvania  Rail- 
road and  its  allied  lines  and  by  the  Baltimore  &  Ohio  Railroad,  these 
defendants  asserting  the  propriety  and  the  right  of  maintaining  lower 
rates  to  and  from  Philadelphia  and  Baltimore  than  to  and  from  New 
York.  The  Erie  Railroad,  with  a  through  line  from  Chicago  to  New 
York,  filed  no  answer  to  the  complaint.  The  other  New  York  roads 
filed  general  denials.  The  Boston  &  Maine  and  the  Boston  &  Albany 
Railroads  joined  with  Boston  in  asserting  the  interests  of  the  port  of 
Boston  and  their  right  as  carriers  to  make  such  rates  to  and  from  Bos- 
ton as  the  interests  of  that  port  and  the  carriers  serving  it  demand. 

The  Baltimore  &  Ohio  and  the  Pennsylvania  base  their  defense  prin- 
cipally upon  the  fact  that  the  rail  haul  to  or  from  Baltimore  or  Phila- 
delphia is  shorter  than  to  or  from  New  York,  and  that  therefore  lower 
rates  to  and  from  Philadelphia  or  Baltimore  than  to  and  from  New 
York  are  fully  justified. 

The  issue  is  a  long-standing  controversy  which  originated  in  and 
has  been  kept  alive  by  the  competition  of  railroads  serving  the  several 
ports  and  by  the  commercial  interests  at  those  ports.  It  is  conceded 
by  one  of  the  principal  witnesses  for  defendants  that  the  so-called 
differential  port  adjustment  is  more  or  less  arbitrary  in  its  nature  and 
is  the  result  of  compromise  and  arbitration  resorted  to  to  settle  or  avert 
rate  wars. 

The  rates  in  question  are  (a)  via  all  rail;  (b)  via  lake  and  rail;  and 
(c)  ex-lake— that  is,  from  the  lake  ports  to  the  Atlantic  ports.  All 
rates  stated  herein,  unless  otherwise  specified,  are  in  cents  per  100 
pounds.  Our  docket  No.  3780,  In  the  Matter  of  Import  Rates,  was 
heard  and  decided  in  connection  with  the  instant  case. 

The  history  of  the  all-rail  differentials  on  export  traffic  was  recited 
in  In  the  Matter  of  Differential  Freight  Rates  to  and  from  North  At- 
lantic ports,  11  I.  C.  C.  13  {ante,  p.  283),  and  need  not  be  restated  here. 


382 


ATLANTIC    PORT   DIFFERENTIALS 


It  is  a  matter  of  common  knowledge  that  since  that  report  was  written 
the  Baltimore  &  Ohio,  if  not  the  Pennsylvania  also,  has  acquired  new 
lines  [58]  which  substantially  strengthen  its  commanding  and  strategic 
position  in  the  middle  west. 

The  present  eastbound  all-rail  class  rates,  taking  Chicago  as  a  repre- 
sentative point,  are  as  follows : 

Classes 1  2  3  4  5  6 

To  New  York,  domestic  and  export 75  65  50  35  30  25 

To  Philadelphia,  domestic  and  export 73  63  48  33  28  23 

To  Baltimore,  domestic  and  export 72  62  47  32  27  22 

To  Boston,  domestic 82  71  55  39  33  27 

To  Boston,  export 75  65  50  35  30  25 

The  present  eastbound  lake-and-rail  class  rates,  taking  Chicago  as 
a  representative  point,  are  as  follows : 

Classes 1  2  3  4  5  6 

To  New  York,  domestic  and  export 63  55  43  30  26  21 

To  Philadelphia,  domestic  and  export 61  53  41  28  24  19 

To  Baltimore,  domestic  and  export 60  52  40  27  23  18 

To  Boston,  domestic 70  61  48  34  29  23 

To  Boston,  export 63  55  43  30  26  21 

The  present  ex-lake  rates  on  grain  to  the  ports,  export  and  domestic, 
are  as  follows,  in  cents  per  bushel : 


Wheat. 


Corn. 


Eye. 


Barley.        Oats. 


From  Buffalo,  N.  Y.,  to— 
New  York — 

Export 

Domestic    

Philadelphia  and 

Baltimore — 

Export 

Domestic   

Boston — 

Export 

Domestic   

From  Erie  to — 
New  York — 

Export 

Domestic    

Philadelphia — 

Export   

Domestic   

Baltimore — 

Export 

Domestic   

From  West  Fairport  to — 
Baltimore — 

Export 

Domestic   

Philadelphia — 

Export  and  domestic 


5.50 
6.50 


5.2 
6.50 


5.50 


5.50 
6.50 

5.2 
6.50 

•5.2 
6 


5.20 
6 

6.50 


4.  75 
5.25 


4.45 
5.25 

4.75 
7.50 


4.75 
5.25 

4.45 
5.25 

4.45 
4.75 


4.45 
4.75 

5.25 


5.25 
6 


4.95 
6.00 


7.75 


4.95 
6 

4.95 
5.. 50 


4.95 
5.50 


4.75 
5.25 


4.55 
5.25 


4.75 
6.50 


4.75 
5.25 

4.55 
5.25 

4.55 
4.75 


4.55 
4.75 

5.25 


3.7 

4 


3.50 
3.75 


3.7 

4.50 


3.7 
4 

3.50 
3.75 

3.50 
3.50 


3.50 
3.50 

3.75 


CHAMBER  OF  COMMERCE  OF  N.  Y.  V.  N.   Y.  C.  &  H.  R.  R.  CO.,  ET  AL.       383 

The  westbound  all-rail  class  rates  to  Chicago  from  the  several  ports 
are  as  follows : 

Classes 1  2  3  4  5  6 

New  York,  domestic  and  import 75  65  50  35  30  25 

Philadelphia,  domestic   69  59  48  33  28  23 

Philadelphia,  import 67  57  47  32  27  22 

Baltimore,  domestic  and  import 67  57  47  32  27  22 

Boston,  domestic    75  65  50  35  30  25 

Boston,  import   67  57  47  32  27  22 

[59]  The  westbound  lake-and-rail  class  rates  to  Chicago  from  the 
several  ports  are  as  follows : 

Classes  1  2  3  4  5  6 

New  York,  domestic  and  import 62  54  41  30  25  21 

Philadelphia,  domestic  and  import 56  48  39  28  23  19 

Baltimore,  domestic  and  import 54  46  38  27  22  18 

Boston,  domestic   62  54  41  30  25  21 

Boston,  import   57  50  38  27  23  20 

The  import  rates  from  Boston.  Philadelphia,  and  Baltimore  are  the 
same  under  a  temporary  arbitration  decision,  the  final  determination 
of  which  is  announced  in  In  the  Matter  of  Import  Rates,  24  I.  C.  C.  78 
(pos^,  p.  403). 

While  little  has  been  said  as  to  Newport  News  and  Norfolk,  it  is 
proper  to  saj-  that  they  constitute  in  reality-  one  port,  served  from  the 
west  principally  by  the  Chesapeake  &  Ohio  and  Norfolk  &  Western 
railwaj-s.  It  does  not  here  appear  that  they  are  included  in  the  dif- 
ferential agreement;  but  it  is  the  established  policy  of  the  road  serv- 
ing those  ports  to  maintain  there  the  same  rates  that  are  contempo- 
raneously maintained  at  Baltimore.  It  is  also  appropriate  to  say  that 
the  carriers  between  the  differential  territory  and  the  Gulf  ports  com- 
pete with  the  carriers  to  the  Atlantic  ports  for  import  and  export 
traffic  and  that  it  is  their  established  policy  to  maintain  rates  to  and 
from  the  Gulf  ports  which  bear  a  definite  relationship  to  the  rates  to 
and  from  the  Atlantic  ports  and  which  take  into  consideration  the  more 
expensive  ocean  service  to  and  from  the  Gulf  ports. 

The  import  and  export  traffic  through  the  port  of  Montreal  has  in- 
creased largely  in  recent  years,  more  especially  with  regard  to  the  ex- 
port of  grain  and  grain  products. 

The  ex-lake  differentials  are  of  prime  importance  in  the  movement 
of  grain  which  is  concentrated  at  the  ports  on  Lake  Superior  and  Lake 
Michigan  and  carried  thence  by  water  to  Buffalo,  Erie,  Fairport,  and 
other  eastern  lake  ports,  from  whence  it  moves  to  the  Atlantic  ports  by 
rail  on  rates  that  are  wholly  independent  of  the  lake  charges. 

About  1891  the  railroads  began  to  compete  with  the  Erie  Canal  for 
this  traffic,  and  in  1893  the  question  of  differentials  on  ex-lake  ship- 
ments arose,     Certain  of  the  New  York  lines  entered  into  a  joint  agree- 


384  ATLANTIC    PORT   DIFFERENTIALS 

ment  to  make  certain  rates  on  this  traffic  regardless  of  canal  competi- 
tion, and  a  separate  agreement  was  made  which  accorded  differentials 
of  one-half  cent  and  three-quarters  of  a  cent  per  bushel  to  Philadelphia 
and  Baltimore,  respectively,  on  shipments  from  Buffalo.  In  1894 
these  differentials  were  reduced  to  one-half  cent  per  bushel  to  both 
Philadelphia  and  Baltimore.  In  1895  the  railroad  agreements  were 
overthrown  and  the  railroads  entered  into  spirited  competition  with 
the  canal.  From  time  to  time  rate  wars  occurred  which  were  tem- 
porarily composed  by  agreements  and  arbitrations.  Every  effort  [60] 
made  to  maintain  equal  ex-lake  rates  to  the  several  Atlantic  ports 
failed. 

In  the  North  Atlantic  Ports  case,  supra,  the  Commission  found  that 
Philadelphia  and  Baltimore  should  be  accorded  a  differential  of  three- 
tenths  of  a  cent  per  bushel  on  ex-lake  grain,  which  opinion  was  shortly 
thereafter  modified  by  making  the  differential  on  ex-lake  oats  and 
barley  one-sixth  of  a  cent  per  bushel. 

Complainants  allege  violation  of  section  1  of  the  act  in  that  the  rates 
to  and  from  New  York  are  unjust  and  unreasonable.  They  say  that 
the  lower  grades  on  the  New  York  Central  lines  make  the  transporta- 
tion cheaper  than  to  Philadelphia  or  Baltimore  via  the  lines  which 
cross  the  Alleghenies,  and  from  this  they  argue  that  the  rates  to  and 
from  New  York  are  unreasonable  per  se.  This  is  answered  by  defend- 
ants in  a  general  way  by  sa^dng  that  any  difference  in  cost  of  transpor- 
tation due  to  the  grades  is  fully  or  more  than  offset  by  the  difference 
in  cost  of  fuel  which  lies  in  abundance  along  their  rights  of  way.  No 
evidence  has  been  presented  which  in  any  wise  lays  a  foimdation  for  a 
finding  that  any  particular  rate  is  unreasonable  per  se. 

Violation  of  section  2  of  the  act  is  alleged  in  that  that  section  pro- 
hibits charging  one  person  more  or  less  than  another  person  for  the 
transportation  of  a  like  kind  of  traffic  under  substantially  similar  cir- 
cumstances and  conditions.  AVe  shall  later  consider  whether  or  not 
the  transportation  is  under  substantially  similar  circumstances  and 
conditions. 

Violation  of  section  3  of  the  act  is  alleged  in  that  the  differential 
adjustment  gives  an  undue  preference  to  Boston,  Philadelphia,  and 
Baltimore  and  subjects  New  York  to  unreasonable  prejudice  or  disad- 
vantage.    This  will  be  referred  to  later. 

Violation  of  section  4  of  the  act  is  alleged,  but  as  has  been  seen  the 
rates  at  issue  are  those  applicable  on  export  and  import  traffic,  and, 
while  the  record  is  not  clear  and  specific  on  that  point,  it  is  not  our 
understanding  that  this  traffic  is  hauled  to  or  from  Baltimore  or  Phila- 
delphia via  any  line  as  to  which  New  York  is  directly  intermediate. 


CHAMBER  OF  COMMERCE  OF  N.   Y.   V.  N.   Y.  C.  &  II.  R.  R.  CO.,  ET  AL.       385 

Some  of  it  may  move  throngli  New  York  to  or  from  Boston,  but  the 
amount  so  hauled  must  be  small. 

The  rates  to  and  from  differential  territory  are  established  in  zones 
substantially  on  distance.  It  frequently  occurs  that  a  circuitous  route 
hauls  traffic  through  a  zone  which  takes  higher  rates  than  that  in  which 
the  point  of  origin  or  destination  is  located.  This,  however,  applies  to 
shipments  to  and  from  New  York  as  well  as  to  and  from  the  other  ports. 
This  situation  is  protected  by  applications  for  relief  from  the  provi- 
sions of  the  fourth  section  and  is  not  here  passed  upon. 

Complainants  contend  that  in  exercising  the  power  vested  in  the 
Commission  to  prescribe  just  and  reasonable  and  nondiscriminatory 
[61]  rates  it  must  be  controlled  by  the  constitutional  provision  that  in 
the  regulation  of  commerce  no  preference  shall  be  given  to  the  ports 
of  one  State  over  those  of  another.  They  argue  that  New  York  has 
numerous  advantages  of  location,  harbor  facilities,  steamship  sailings, 
market,  etc.,  the  benefit  of  which  is  in  some  degree  taken  from  it  by 
the  differential  rates,  and  that  the  maintenance  of  lower  rates  to  the 
other  ports  is  unlawful  under  the  Act  to  Kegulate  Commerce  and  in  vio- 
lation of  the  constitution  of  the  United  States. 

If  one  railroad  may  not  make  lower  rates  to  a  given  port  than  an- 
other railroad  makes  to  another  port  in  another  state  without  violating 
the  constitution  of  the  United  States  it  would  seem  necessarily  to  fol- 
low that  railroad  rates  must  be  the  same  from  a  given  point  to  every 
port  in  every  state,  regardless  of  distance,  extent  and  termini  of  car- 
riers' lines,  cost  or  value  of  the  service,  and  of  the  discriminations 
which  would  be  thereby  created.  One  city  or  state  prescribes  certain 
harbor  dues  and  charges,  while  another  city  or  state  elects  to  furnish 
harbor  facilities  free.  All  such  considerations  determine  in  some  meas- 
ure the  attractiveness  of  the  port  to  shipping  and  3'et  so  far  as  we  know 
it  has  never  been  held  that  the  exercise  of  those  rights  by  municipali- 
ties or  states  is  unconstitutional. 

Complainants  aver  that  any  excess  in  the  rates  on  export  and  import 
traffic  to  and  from  the  differential  territory  over  that  charged  from 
and  to  Baltimore,  Philadelphia,  or  Boston  is  imposed  for  the  purpose 
of  diverting  traffic  from  New  York  to  these  other  ports ;  or,  in  other 
words,  for  the  purpose  of  making  a  fair  division  of  the  traffic  as  be- 
tween the  railroads  and  the  ports  and  constitutes  an  unlawful  addi- 
tional charge  for  the  sole  purpose  of  discriminating  against  New  York. 
The  record  in  the  North  Atlantic  Ports  case,  supra,  is  stipulated  into 
this  record,  and  it  there  appears  that  former  officers  of  some  of  the 
New  York  roads  testified  that  they  would  be  glad  to  transport  this 
traffic  to  and  from  New  York  at  as  low  rates  as  were  contemporaneously 
25 


386  ATLANTIC    PORT   DIFFERENTIALS 

applied  to  and  from  Baltimore  if  they  could  do  so.  This  meant  that 
they  would  be  glad  to  put  New  York  on  a  parity  with  Baltimore  if 
the  roads  serving  Baltimore  would  maintain  as  high  rates  to  Baltimore 
as  were  thus  established  at  New  York.  The  New  York  commercial 
interests  contend  that  the  New  York  rates  should  be  reduced  to  the 
Baltimore  basis  and  that  the  New  York  roads  are  williiig  and  anxious 
to  so  reduce  them.  The  testimony  above  referred  to  was  given  several 
j^ears  ago.  No  present  responsible  officers  of  the  New  York  roads  so 
testify,  and  in  the  light  of  present-day  conditions,  as  shown  in  hi  re 
Investigation  of  Advances  in  Rates,  20  I.  C.  C.  243,  we  can  not  say  that 
we  have  here  any  clear  expression  of  such  desire. 

As  has  been  seen,  the  differentials  are  the  result  of  compromise,  arbi- 
tration, and  agreement,  resorted  to  as  the  only  means  so  far  found  of 
[62]  averting  rate  wars.  The  railroads  serving  Boston  have  insisted  at 
all  times  that  the  export  and  import  rates  to  and  from  Boston  should 
not  exceed  those  to  and  from  New  York.  The  railroads  serving  Phila- 
delphia and  Baltimore  have  always  insisted  that  the  rates  on  this  traffic 
from  and  to  those  ports  should  be  lower  than  those  contemporaneously 
maintained  from  and  to  New  York. 

The  roads  serving  Baltimore  and  Philadelphia,  as  well  as  the  com- 
mercial interests  of  those  cities,  aver  that  the  differentials  might  law- 
fully and  reasonably  be,  and  in  fact  ought  to  be,  wider  than  they  are, 
and  that  to  maintain  them  at  as  low  figures  as  now  obtain  has  the  effect 
of  giving  New  York  an  advantage  to  wiiich  it  is  not  entitled  on  any 
ground  except  the  adoption  of  this  means  of  averting  rate  wars. 

The  Baltimore  &  Ohio  Railroad  denies  that  it  should  or  may  be  re- 
quired to  sacrifice  its  legitimate  revenues  by  furnishing  a  service  to  and 
from  New  York  at  the  same  rates  it  receives  for  its  service  to  and  from 
Baltimore.  It  shows  that  its  lighterage  and  other  terminal  services  in 
New  York  cost  it  substantially  more  than  the  present  allowance  it  re- 
ceives for  that  service  out  of  the  joint  rates.  On  this  account  it  shows 
a  deficit  for  the  years  1909-10-11  of  more  than  $1,250,000. 

This  defendant  suggests  that  before  the  railroads  were  subject  to 
regulation  the  control  of  a  large  volume  of  traffic  was  a  potent  influence 
in  securing  low  rates  from  railroads ;  that  New  York  being  the  largest 
and  strongest  port,  served  by  strong  railroad  lines,  this  wholesale  prin- 
ciple worked  steadily  in  New  York's  favor,  and  the  rates  to  and  from 
New  York  became  more  and  more  favorable  as  compared  with  other 
and  less  influential  ports,  which  gave  New  York  an  advantage  which 
it  still  holds;  that,  recognizing  the  long-established  status  and  the 
business  interests  that  had  adjusted  themselves  thereto,  the  differen- 
tials were  substituted  for  the  differences  in  rates  that  might  otherwise 


CHAMBER  OF  COMMERCE  OP  N.  Y.  V.  N.  Y.  C.  &  II.  R.  R.  CO.,  ET  AL.       387 

have  been  established,  as  some  recognition  of  the  substantial  rights  of 
the  other  ports.  It  replies  to  New  York's  allegations  that  the  differ- 
entials penalized  New  York  for  her  advantages  by  saying  that  the  ar- 
bitrary differentials  are  merely  substitutes  for  the  more  substantial 
and  logical  differences  in  favor  of  Philadelphia  and  Baltimore  which 
would  naturally  exist,  and  that  they  are  established  not  for  the  pur- 
pose of  diverting  traffic  from  New  York  but  as  a  limitation  upon  the 
arrangement  which  New  York  had  secured  for  diverting  traffic  from 
Baltimore  and  Philadelphia,  and  in  an  effort  to  prevent  New  York 
from  acquiring  all. 

The  Boston  interests  assert  that  the  Boston  railroads  are  entitled  by 
law  and  that  it  is  their  duty  to  meet  the  lowest  export  and  import  rates 
offered  via  an,y  of  the  ports  here  considered,  and  in  this  position  the 
Boston  &  Maine  Railroad  concurs.  Boston  asks,  therefore,  an  order 
or  an  expression  of  opinion  from  the  Commission  to  the  effect  [63] 
that  the  inland  rates  on  import  and  export  traffic  from  and  to  the  ports 
of  Boston,  Philadelphia,  and  Baltimore  should  be  the  same,  and  that 
they  should  be  lower  than  like  rates  to  and  from  New  York  to  the  ex- 
tent of  the  present  differentials  at  Baltimore.  They  state  that  it  is 
conclusively  shown  that  Boston  can  not  live  commercially  without 
equal  inland  export  and  import  rates  with  Baltimore.  They  ask  "the 
boon  of  free  competition"  in  order  that  Boston  may  secure  an  equita- 
ble share  of  the  export  and  import  traffic.  It  is  somewhat  difficult  to 
see  how  the  fixing  of  arbitrary  and  artificial  differentials  can  be  tanta- 
mount to  ' '  the  boon  of  free  competition. ' ' 

They  call  attention  to  the  long  list  of  natural  and  acquired  advan- 
tages existing  at  the  port  of  New  York,  and  from  it  argue  that  if  Bos- 
ton is  deprived  of  its  advantage  of  lower  ocean  and  through  rates  it 
can  not  compete  on  even  terms  with  New  York  any  more  than  can 
Philadelphia  or  Baltimore.  The  advantages  referred  to  are,  a  natural 
port,  unlimited  capacity  for  future  development,  the  Erie  Canal,  fast 
and  frequent  steamship  service,  option  market,  guarantee  of  quality 
of  export  tlour,  banking  facilities,  credit  market,  ocean  rates,  and 
numerous  established  commercial  and  trade  connections  with  foreign 
countries.  Not  doubting  that  New  York  has  all  of  these  advantages 
we  inquire,  Which  of  them  has  not  come  as  a  gift  of  Nature  or  as  a 
result  of  judicious  investment  or  commercial  enterprise  ?  And  which 
if  any  of  them  may,  as  a  matter  of  law,  be  taken  from  New  York  or 
nullified  by  arbitrary  rail  rate  adjustments  that  are  not  founded  in 
reasonableness  measured  by  the  recognized  standards,  and  the  absence 
of  unjust  discrimination  ? 

It  is  urged  that  the  cost  of  delivering  export  traffic  to  and  1;iking 


388  ATLANTIC    PORT   DIFFERENTIALS 

import  traffic  from  the  steamships  at  New  York,  which  is  borne  by  the 
railroads,  is  materially  greater  than  at  Boston,  and  that  therefore  the 
rates  to  and  from  Boston  should  be  less  than  to  and  from  New  York. 
This  suggestion  seems  to  ignore  the  probable  fact  that  the  cost  of  the 
additional  haul  to  and  from  Boston  wonld  perhaps  offset  and  perhaps 
exceed  the  additional  terminal  cost  at  New  York. 

It  is  said  that  Baltimore  and  Philadelphia  have  a  tremendous  ad- 
vantage over  Boston  in  the  exportation  of  grain  raised  in  the  states 
nearby  to  Baltimore  and  Philadelphia.  Is  this  an  advantage  of  which 
Philadelphia  or  Baltimore  may  lawfully  or  justly  be  deprived  by  rate 
adjustments  ? 

It  is  urged  that  the  all-rail  differentials  applying  at  Baltimore  and 
Philadelphia,  which  are  greater  than  the  ex-lake  differentials,  give 
Philadelphia  and  Baltimore  a  practical  monopoly  of  the  all-rail  export 
grain  as  against  Boston.  It  is  to  be  noted,  however,  that  substantially 
all  of  the  all-rail  export  grain  reaching  Philadelphia  and  Baltimore 
is  transported  from  points  of  origin  or  from  primary  [64]  markets  over 
the  Pennsylvania  and  Baltimore  &  Ohio  systems,  neither  of  which 
reaches  Boston. 

Boston  suggests  that  New  York  had  little  to  say  as  to  diversion  of 
export  traffic  from  New  York  to  Boston  "for  the  very  good  reason  that 
the  inland  export  rates  are  the  same  to  the  two  ports,"  and  that  on 
equal  export  rates,  inland  and  ocean.  New  York  "is  cutting  the  ground 
from  under  Boston."  It  is  difficult  to  see  how  any  unjust  discrimina- 
tion against  Boston  can  be  found  in  an  adjustment  which  for  a  sub- 
stantially longer  rail  haul  gives  it  the  same  rates  as  New  York,  and  it 
is  equally  difficult  to  see  upon  what  basis  we  would  find  that  Boston 
is  entitled  to  lower  inland  rates  on  traffic  to  or  from  differential  terri- 
tory than  is  New  York. 

It  is  said  that  under  equal  inland  rates  to  New  York  and  Boston 
any  change  in  the  relative  movement  of  this  traffic  caused  by  change  in 
the  ocean  rates  simply  manifests  the  need  of  the  steamship  lines  which 
have  lines  common  to  both  ports  for  the  particular  traffic  at  the  respec- 
tive ports.  Manifestly  this  is  so  and  it  ought  to  be  so,  and  in  a  modi- 
fied degree  it  is  true  where  differentials  exist,  for  the  ocean  rates  to 
and  from  the  differential  ports  are  fluctuated  in  order  to  accommodate 
the  needs  and  wishes  of  the  steamship  lines.  Each  of  the  ports  con- 
tends that  its  traffic  is  "diverted"  to  one  or  more  of  the  other  ports, 
but  inasmuch  as  no  fixed  proportion  of  the  traffic  has  been  assigned 
to  any  port  and  as  the  records  show  that  the  percentages  of  traffic 
moving  through  the  different  ports  varies  from  year  to  year  and  from 
period  to  period,  it  would  seem  more  accurate  to  sav  that  the  rate  ad- 


CHAMBER  OF  COMMERCE  OP  N.  Y.  V.  N.   Y.  C.  S:   H.  R.  R.  CO.,  ET  AL.       389 

justiiieiits  are  made  for  the  purpose  of  attracting  traffic  to  the  several 
ports. 

In  recent  years  certain  steamship  lines  have  arranged  their  sailings 
so  that  their  vessels  land  at  Boston  or  Philadelphia  on  the  westward 
voyage  and  proceed  thence  to  Baltimore  to  leave  part  of  their  cargo 
and  to  secure  cargo  for  the  eastward  voyage.  The  exportations  of 
grain  from  Baltimore  have  greatly  increased  in  recent  years.  It  may 
be  that  this  is  to  some  extent  due  to  the  differential  rates,  but  to  some 
extent  it  is  because  of  attractive  port  facilities  for  the  handling  of  that 
traffic,  and  in  part  it  comes  from  the  large  quantities  of  near-by  grain 
which  could  not  under  any  reasonable  rate  adjustment  find  outlet 
through  the  other  ports. 

Boston  experiences  some  difficulty  in  getting  steamers  to  come  there 
with  imports  which  it  needs  because  the  vessels  are  unable  to  there 
secure  eastbound  lading.  But  it  can  not  be  that  in  law  the  duty  de- 
volves upon  the  railroads  to  so  adjust  their  rates  as  to  equalize  those 
conditions,  or  that  it  is  within  the  reasonable  and  proper  exercise  of 
the  powers  of  this  Commission  to  require  such  adjustments.  If  cer- 
tain imports  would  naturally  move  to  Boston  and  certain  [65]  exports 
would  naturally'  move  from  Baltimore,  why  should  the  railroads  or 
this  Commission  so  adjust  the  rail  rates  as  to  equally  divide  that  ton- 
nage and  insure  equal  steamship  sailings  to  and  from  those  ports  ? 

Of  the  imports  through  Boston  only  22  per  cent,  are  for  differential 
territory.  A  large  portion  of  the  export  tonnage  through  New  York 
moves  to  foreign  ports  to  which  steamship  lines  have  direct  sailings 
from  New  York  and  no  sailings  from  the  other  ports. 

As  we  have  seen,  Baltimore  and  Philadelphia  export  large  quantities 
of  grain  grown  in  territory  tributary  to  those  ports  and  the  surplus  of 
such  crops  or  the  attractiveness  of  the  export  market  for  them  would 
necessarily  affect  that  movement  from  year  to  year.  It  appears  that 
dissatisfaction  of  exporters  with  the  inspection  at  a  certain  market  may 
and  does  affect  the  exportations  from  that  port. 

Looking  at  the  geography  of  the  principal  railroads  serving  these 
several  ports,  we  find  that  the  New  York  Central  lines  constitute  a 
system  which  reaches  many  of  the  important  commercial  centers  in 
the  differential  territory,  with  termini  at  New  York,  Boston,  Chicago, 
and  St.  Louis.  Traffic  moving  to  and  from  Boston  via  this  sj^stem 
would  not  move  through  New  York,  but  would  go  via  Alban\^  and  the 
Boston  &  Albany  line.  The  Boston  &  Maine  Railroad  has  lines  west 
and  north  from  Boston  and  connects  with  the  Canadian  Pacific,  which 
has  its  own  line  to  Detroit ;  with  the  Grand  Trunk,  which  has  its  own 
Ime  to  Chicago  and  other  important  centers  in  differential  territory; 


390  ATLANTIC    PORT   DIFFERENTIALS 

and  with  the  New  York  Central  and  other  lines  at  or  near  Albany. 
The  Lehigh  Valley  has  a  line  from  Buffalo  to  New  York  and  reaches 
Philadelphia  in  connection  with  the  Philadelphia  &  Reading.  The  Del- 
aware, Lackawanna  &  "Western  has  a  line  from  Buffalo  to  New  York 
and  has  connections  with  the  Pennsylvania  Railroad  to  Philadelphia 
and  to  Baltimore.  The  Erie  Railroad  has  a  line  from  Chicago  and 
other  important  centers  in  differential  territory  to  Buffalo  and  to  New 
York.  The  Pennsylvania  Railroad,  Avith  its  allied  lines,  has  main  lines 
from  Chicago,  St.  Louis,  and  many  other  important  points  in  differen- 
tial territory  to  Baltimore,  Philadelphia,  and  New  York.  Its  line  from 
the  West  to  New  York  passes  through  Philadelphia.  It  has  lines  to 
Buffalo,  Erie,  and  Cleveland,  on  Lake  Erie,  and  traffic  moved  by  it  be- 
tween those  ports  and  New  York  goes  via  Philadelphia.  The  Baltimore 
&  Ohio  system  has  lines  from  Chicago,  St.  Louis,  and  many  other  im- 
portant places  in  differential  territory  through  Baltimore  to  Philadel- 
phia. By  arrangement  with  the  Philadelphia  &  Reading  and  the  Cen- 
tral of  New  Jersey  its  through  route  is  extended  from  Philadelphia  to 
New  York,  at  which  point  the  Baltimore  &  Ohio  has  and  operates  its 
own  terminal  facilities.  This  system  reaches  Toledo,  Sandusky,  Lo- 
rain, Cleveland,  and  Fairport,  on  Lake  Erie. 

[66]  Every  railroad  desires  to  get  the  longest  possible  haul  on  the 
traffic  which  it  transports,  and  therefore  the  Boston  &  IMaine,  the 
Grank  Trunk,  and  the  Canadian  Pacific  naturally  prefer  to  see  the 
traffic  move  through  Boston.  The  New  York  Central,  the  Lackawanna, 
the  Lehigh  VaUey,  and  the  Erie  prefer  to  see  it  move  through  New 
York.  Philadelphia  is  the  home  city  of  the  Pennsjdvania  system  and 
it  is  to  its  interests  to  have  the  traffic  move  through  Philadelphia. 
Baltimore  is  the  home  city  of  the  Baltimore  &  Ohio  system  and  it  is  to 
its  interests  to  see  the  traffic  move  through  Baltimore.  The  haul  via 
the  Pennsylvania  system  is  substantially  the  same  to  Philadelphia  and 
to  Baltimore  and  is  some  90  miles  greater  to  New  York  than  to  Phila- 
delphia. The  haul  via  the  Baltimore  &  Ohio  system  is  90  miles  farther 
to  Philadelphia  than  to  Baltimore  and  186  miles  farther  to  New  York 
than  to  Baltimore.  As  stated,  these  systems  assert  their  right  to 
charge  more  for  the  longer  haul  and  the  extra  service.  In  addition 
to  this  the  Baltimore  &  Ohio  shows  that  its  earnings  on  a  shipment  to 
or  from  Baltimore  are  greater  than  on  the  same  shipment  to  or  from 
New  York,  due  to  the  fact  that  on  the  New  York  business  it  must  di- 
vide the  earnings  with  its  connections  and  must  perform  a  substantiallj-^ 
more  expensive  terminal  service. 

Tlie  traffic  being  that  which  moves  to  and  from  recognized  competi- 
tive territory,  all  of  the  carriers  that  are  in  a  position  to  do  so  join 


CHAMBER  OF  COMMERCE  OP  N.  Y.  V.  N.  Y.  C.  &  II.  R.  R.  CO.,  ET  AL.       391 

with  their  connections  in  moving  such  of  it  as  they  can  secure  to  any 
and  all  of  the  ports  under  the  so-called  differential  rates.  The  carriers 
whose  lines  reach  the  points  of  origin  and  destination  of  this  traffic 
and  all  of  their  connections  compete  for  it,  and,  in  so  far  as  the  differ- 
ential adjustment  is  observed,  distance  is  largely  disregarded. 

As  a  matter  of  fact  the  diff'erential  adjustment  is  not  adhered  to. 
This  is  evidenced  by  the  facts  developed  in  Federal  Sugar  lie  fining  Co. 
V.  B.  tO  0.  R.  R.  Co.,  17  I.  C.  C.  40,  and  by  the  fact,  incidentally 
brought  out  in  this  case  and  investigated  from  the  records  of  the  car- 
riers by  examiners  of  the  Commission,  that  upon  eight  cargoes  of  agri- 
cultural implements  exported  through  Baltimore  between  Jan.  1  and 
April  1,  1911,  the  delivering  line  at  Baltimore  and  its  connections  paid 
the  agent  of  the  shippers  approximately  $35,000  allowance  "in  lieu  of 
lighterage  and  floatage,"  when  in  fact  no  such  service  was  performed 
as  to  any  of  the  tonnag-e  making  up  those  cargoes.  The  allowance  was 
made  on  the  strength  of  a  tariff'  of  the  terminal  line  at  Baltimore  which 
applied  only  at  Baltimore  and  the  existence  of  which  was  not  generally 
known. 

Complainants  urge  that  the  present  proceeding  differs  from  previous 
proceedings  affecting  the  same  issues  in  that  now  the  Commission  has 
been  vested  with  rate-making  power  and  must  determine  the  inherent 
reasonableness  of  the  rates  in  question. 

[67]  A  mass  of  statistics  have  been  filed  by  the  parties,  each  argu- 
ing from  its  statistics  the  conclusions  which  it  thinks  should  be  reached. 
Complainants  say:  "The  statistics  and  the  testimony  relating  to  the 
movement  of  traffic  are  all  immaterial  except  as  they  may  have  a  bear- 
ing upon  the  historical  facts  relating  to  the  origin  and  purpose  of  the 
differentials."  Many  of  these  statistical  tables  are  of  value  only  to 
that  extent,  for  the  reason  that  they  are  not  confined  to  and  do  not  as- 
sume to  differentiate  the  traffic  to  which  the  differential  import  and 
export  rates  applj^  There  is  a  heavy  movement  of  import  and  export 
traffic  through  the  several  ports  which  has  destination  or  origin  at  the 
ports  or  at  points  not  situated  in  the  differential  territory.  In  mak- 
ing the  differential  agreement  it  was  apparently  conceded  that  the  ter- 
ritory east  of  the  Buffalo-Pittsburgh  line  was  largely  noncompetitive, 
and  that  the  import  and  export  traffic  having  destination  and  origin 
therein  would  and  should  find  its  way  to  the  natural  or  most  con- 
venient port.  Numerous  statistical  tables  measure  the  relationship  of 
the  ports  and  the  effect  of  the  rate  adjustments  upon  the  movement  of 
traffic  by  showing  the  value  of  the  imports  or  exports.  Manifestly, 
such  statistics,  which  include  the  value  of  precious  stones,  metal,  bul- 
lion, and  perhaps  money,  are  of  no  help  in  determining  the  question 
here  presented. 


592  ATLANTIC    iPORT   DIFFERENTIALS 

One  exhibit  shows  that  of  the  total  movement  of  import  traffic 
through  the  four  ports,  New  York  secured  for  the  period  1909  to  1911, 
inclusive,  39.6  per  cent.,  as  compared  with  31.1  per  cent,  for  the  period 
1906  to  1908,  inclusive.  The  percentages  of  the  other  ports  for  the 
same  periods,  respectively,  were:  Philadelphia  19.1,  20.4;  Baltimore 
28.1,  34.4 ;  Boston  13.2,  14.1.  The  total  increase  in  tonnage  was  815,- 
098  tons,  of  which  New  York  secured  513,868  tons. 

Another  exhibit  shows  that  of  the  import  traffic  in  tons  to  differ- 
ential territory  for  1911,  New  York  secured  58.4  per  cent,  of  that  which 
moved  under  class  rates  and  28  per  cent,  of  that  which  moved  under 
commodity  rates;  Philadelphia  secured  15.4  per  cent,  under  the  classes 
and  24  per  cent,  under  the  commodity  rates ;  Baltimore  18.1  per  cent, 
under  the  classes  and  32  per  cent,  under  the  commodity  rates;  and 
Boston  8.1  per  cent,  under  the  classes  and  16  per  cent,  under  the  com- 
modity rates. 

On  an  exhibit  it  appears  that  of  the  exports  of  wheat,  corn,  and  oats, 
New  York  secured  in  1899,  25  per  cent. ;  in  1905,  25.8  per  cent. ;  in 
1911,  24.4  per  cent.  Its  highest  percentage  was  27.5  in  1907,  and  its 
lowest  16.9  in  1910.  During  the  same  period  Philadelphia  had  12.3 
per  cent,  in  1899;  8.6  per  cent,  in  1905;  10.8  per  cent,  in  1911.  Its 
highest  percentage  was  15.7  in  1900,  and  its  lowest  7.5  in  1903.  Balti- 
more had  17.4  per  cent,  in  1899;  13  per  cent,  in  1905;  14.6  per  cent, 
in  1911.  Its  highest  percentage  was  17.6  in  1901  and  its  lowest  8.6  in 
1909.  [68]  Boston  had  10.2  per  cent,  in  1899  ;  10.5  per  cent,  in  1905 ; 
11.3  per  cent,  in  1911.  Its  highest  percentage  was  12.3  in  1901  and  its 
lowest  7.5  in  1903. 

It  is  thus  seen  that  while  the  percentages  of  the  several  ports  have 
fluctuated  widely  from  year  to  year  the  differences  between  1899  and 
1911  are  not  striking.  Each  of  the  ports  has  a  slightly  smaller  per- 
centage excepting  Boston,  which  increased  1  per  cent. 

During  the  same  period  the  percentages  of  export  flour  secured  by 
the  several  ports  are  stated  to  have  been  as  follows:  New  York,  in 
1899,  28.4;  in  1905,  36.4;  in  1911,  36.4.  Its  highest  percentage  was 
36.4,  in  1905  and  again  in  1911,  and  its  lowest  26.3,  in  1901.  Phila- 
delphia had  14.1  per  cent,  in  1899, 16  per  cent,  in  1905,  10.7  per  cent,  in 
1911.  Its  highest  percentage  was  22,2,  in  1907,  and  its  lowest  10.7,  in 
1911.  Baltimore  had  20.8  per  cent,  in  1899,  15.2  per  cent,  in  1905, 
9.9  per  cent,  in  1911.  Its  highest  percentage  was  21.8,  in  1903,  and 
its  lowest  9.3,  in  1910.  Boston  had  10.1  per  cent,  in  1899,  6.2  per  cent, 
in  1905,  6.2  per  cent,  in  1911.  Its  highest  percentage  was  10.4,  in  1900, 
and  its  lowest  5.1,  in  1903. 


CHAMBER  OF  COMMERCE  OP  N.  Y.  V.  N.  Y.  C.  &  H.  R.  R.  CO.,  ET  AL.      393 

On  this  traffic  it  appears  that  New  York  has  made  a  substantial  gain, 
while  the  other  ports  have  lost,  the  greatest  loss  being  experienced  by 
Baltimore, 

Another  exhibit  purporting  to  show  the  exports  of  Hour  through 
those  ports  for  the  years  1906  to  1911,  inclusive,  shows  that  in  1906 
New  York  had  42  per  cent,  and  in  1911,  60.4  per  cent.;  that  in  1906 
Boston  had  10  per  cent,  and  in  1911,  6.4  per  cent.;  that  in  1906  Phila- 
delphia had  27  per  cent,  and  in  1911,  16.7  per  cent.;  that  Baltimore 
had  21  per  cent  in  1906  and  16.5  per  cent,  in  1911, 

The  differences  in  the  percentages  shown  in  these  exhibits  empha- 
size the  difficulty  of  basing  any  conclusion  upon  the  statistics,  even  if 
they  were  controlling.  It  Avas  suggested  before  the  hearing  was  had 
that  the  contending  parties  get  together  and  agree  upon  a  uniform 
basis  and  method  of  preparing  the  statistics,  but  that  suggestion  was 
not  acceptable  and  each  party  has  prepared  its  own  from  such  sources 
and  authorities  and  in  such  manner  as  it  elected. 

Another  exhibit  shows  that  of  the  tonnage  of  export  flour  and  grain 
products  moving  lake-and-rail  for  the  years  1909  and  1910  New  York 
secured  33  per  cent.,  Boston  9  per  cent.,  Philadelphia  28  per  cent.,  and 
Baltimore  30  per  cent. 

From  this  it  would  appear  that  this  tonnage  moved  in  quite  equal 
volume  to  the  ports  of  New  York,  Philadelphia,  and  Baltimore.  Ob- 
viously it  would  require  some  unusual  condition  or  some  strong  induce- 
ment to  attract  this  business  to  Boston,  especially  in  view  of  the  fact 
that  the  main  trunk  lines  reaching  Baltimore  and  Philadelphia  and 
New  York  have  their  own  boats  on  the  lakes. 

[69]  Another  exhibit  shows  the  movement  in  bushels  of  export  Cana- 
dian breadstuffs  in  bond  for  the  period  1904 — 1909  and  1910 — 1911. 
In  the  first  period  Boston  secured  6,800,000  and  in  the  second  period 
8,200,000;  Philadelphia  secured  for  the  two  periods  respectively  1,- 
900,000  and  5,400,000 ;  Baltimore,  460,000  and  2,020,000 ;  New  York, 
5,600,000  and  11,400,000. 

From  this  it  is  argued  that  Boston  secured  an  increase  of  20.5  per 
cent.,  while  the  others  secured  increases  in  much  larger  percentages, 
but  it  is  seen  that  although  Boston  had  increased  in  the  second  period 
over  the  first  20.5  per  cent,  and  Baltimore  333  per  cent.,  Boston  had 
for  the  second  period  8,200,000  bushels,  as  compared  with  Baltimore's 
2,020,000,  and  that,  although  Philadelphia  had  increased  184  per  cent., 
it  had  for  the  second  period  but  5,400,000  bushels. 

An  exhibit  stating  the  percentage  of  tonnage  of  west-bound  import 
freight  destined  to  and  beyond  the  western  termini  of  the  trunk  lines, 
which,  generally  speaking,  means  Builfalo,  Pittsburgh,  and  beyond, 


J^94  ATLANTIC    PORT   DIFFERENTIALS 

shows  that  in  1905  Boston  had  9  per  cent,  and  in  1910,  13.1  per  cent. ; 
that  in  3905  New  York  had  34  per  cent,  and  in  1910,  36.1  per  cent.; 
that  in  1905  Philadelphia  had  16.4  per  cent,  and  in  1910,  18.2  per 
cent. ;  and  that  in  1905  Baltimore  had  31.2  per  cent,  and  in  1910,  26.1 
per  cent. 

The  original  agreement  for  differentials  was  based  on  the  fact  that 
the  ocean  rates  for  freights  to  and  from  foreign  markets  were  less  from 
and  to  New  York  than  from  and  to  the  other  ports,  and  the  effort  was 
to  equalize  the  entire  through  charge  via  the  several  ports. 

"Where  there  is  steamship  competition  between  two  or  more  of  our 
ports  and  the  same  foreign  destination,  the  ocean  freights  are  higher 
to  and  from  Boston,  Philadelphia,  and  Baltimore  than  to  and  from 
New  York.  It  appears  that  the  steamship  lines  plying  from  Boston, 
Philadelphia,  and  Baltimore  absorb  or  "get"  as  much  of  the  differen- 
tial inland  rate  as  possible  in  their  higher  ocean  rates.  But  this  has 
the  effect  of  giving  these  ports  ocean  service  which  otherwise  they  would 
not  have. 

It  appears  that  full  cargo  rates  are.  now  the  same  from  all  of  the 
ports,  but  that  substantially  no  full  cargo  business  is  done  except  at 
Baltimore  and  Philadelphia.  In  some  instances  full  cargoes  are  moved 
by  independent  tramp  vessels,  and  in  some  instances  by  tramp  ves- 
sels that  have  been  employed  by  regular  lines  to  move  tonnage  which 
they  can  not  accommodate  in  their  regular  boats.  Some  contend  that 
the.  ocean  rates  are  known  and  stable  quantities.  But  that  contention 
is,  we  think,  overcome  by  a  preponderance  of  testimony  in  this  and 
other  proceedings,  and  by  the  fact  that  one  important  ocean  freight- 
carrying  line  in  declining  to  comply  with  a  request  for  [70]  copies  of 
its  schedules  of  rates,  stated  that  they  were  not  tariffs  in  the  sense  that 
they  would  or  could  be  maintained.  The  ocean  rates  fluctuate  accord- 
ing to  the  spare  room  available  as  the  time  approaches  when  the  vessel 
must  sail.  The  lines  sailing  from  Baltimore  and  Philadelphia  know 
that  the  inland  rates  are  lower  to  and  from  those  ports  than  to  and 
from  New  York,  and  that  therefore  they  can  get  higher  ocean  rates  at 
the  out-ports.  In  other  words,  the  differentials  to  some  extent  operate 
as  a  bonus  to  the  ocean  carriers  to  bring  traffic  to  and  seek  traffic  at 
the  ports  where  the  lower  inland  rates  apply.  But  it  is  contended  that 
the  ocean  haul  is  longer  to  and  from  the  out-ports  than  to  and  from 
New  York,  and  that  therefore  the  ships  will  not  serve  the  out-ports 
unless  they  can  get  somewhat  higher  rates  there.  It  was  testified  in 
the  1905  proceeding  and  again  in  this  record  that  it  costs  less  to  load 
boats  at  Baltimore  and  Philadelphia  than  in  New  York.  Some  wit- 
nesses say  that,  all  things  considered,  the  ocean  transportation  is  less 


CHAMBER  OF  COMMERCE  OF  N.  Y.  V.  N.  Y.  C.  &  II.  R.  R.  CO.,  ET  AL.       395 

to  and  from  the  out-ports  than  to  and  from  New  York.     Others,  how- 
ever, contradict  this. 

Representatives  of  the  contending  ports  show  elaborately  their  sev- 
eral natural  and  acquired  advantages,  the  improvements  that  have  been 
made  and  that  are  in  contemplation,  the  number  of  ocean  lines  plying 
to  and  from  the  ports,  and  the  number  of  sailings.  The  out-ports 
argue  that  the  differentials  are  essential  to  their  existence  as  import 
and  export  ports,  and  that  if  the  differentials  are  not  preserved  the 
only  part  of  this  traffic  which  they  can  secure  will  be  that  which  New 
York  is  physically  unable  to  handle.  New  York's  representatives  say 
that  the  state  and  city  have  expended  large  sums  of  money  to  improve 
the  harbor  and  enlarge  its  facilities  and  that  the  arbitrary  differentials 
against  New  York  and  in  favor  of  the  other  ports  counteract  or  largely 
nullify  the  benefits  which  they  ought  to  reap  from  those  efforts  and 
expenditures. 

The  fact  that  the  United  States  government  has  done  much  to  im- 
prove these  various  waterways  and  harbors  is  referred  to,  from  which 
it  is  only  reasonable  to  infer  that  it  is  the  policy  of  the  government  to 
have  these  several  ports  available  and  to  encourage  traffic  through 
them.  It  is  too  well  established  to  admit  of  further  argument  that 
neither  the  railroads  nor  the  Commission  may  adjust  rates  in  sucli  way 
as  to  deprive  a  place  of  its  natural  advantages  or  give  it  artificial  ad- 
vantages which  are  withheld  from  a  competitor.  If  this  is  true  as  to 
natural  advantages,  it  must  be  doubly  true  as  to  advantages  acquired 
through  enterprise  and  investment. 

Complainants  allege  that  higher  rates  are  imposed  to  and  from  New 
York  to  offset  New  York's  advantages.  Representatives  of  Baltimore 
and  Philadelphia  say  that  it  is  not  the  maintenance  of  higher  rates  at 
New  York,  but  the  maintenance  of  lower  rates  at  Philadelphia  [71] 
and  Baltimore,  to  which  they  are  entitled  by  their  geographical  posi- 
tion. Whether  we  say  that  higher  rates  are  maintained  at  New  York 
or  that  lower  rates  are  maintained  at  Baltimore  and  Philadelphia  we 
reach  the  same  result.     The  difference  between  the  rates  is  the  same. 

Reference  is  made  to  an  option  market  in  New  York  as  one  of  its 
advantages,  and  the  absence  of  such  market  at  the  other  ports  as  one 
of  their  disadvantages,  which  justify  the  differences  in  the  rates.  We 
do  not  think  that  the  existence  of  an  option  market  at  one  place  and 
the  absence  of  it  at  another  place  is  a  proper  consideration  in  the  rela- 
tive adjustment  of  rates. 

The  short  line  from  Buffalo  to  New  York  is  398  miles,  to  Philadel- 
phia 416  miles,  and  to  Baltimore  890  miles.  From  Buffalo  to  these 
three  ports  there  is  no  substantial  difference  in  distance.     The  short 


396  ATLANTIC   PORT   DIFFERENTIALS 

line  from  Erie  to  Baltimore  is  424  miles,  and  to  Philadelphia  it  is  436 
miles;  from  Fairport  to  Baltimore  it  is  454  miles,  and  to  Philadelphia 
473  miles.  Erie  is  a  Lake  port  served  principally  by  the  Pennsylvania 
system  and  Fairport  is  served  principally  by  the  Baltimore  &  Ohio 
system,  and,  as  has  been  seen,  the  traffic  via  either  of  these  systems 
from  Erie  or  from  Fairport  to  New  York  passes  through  Baltimore  or 
Philadelphia  or  both. 

Complainants  ask  what  can  justify  the  Commission  prescribing 
greater  through  rates  on  traffic  that  moves  between  Chicago  and  Buf- 
falo by  steamer  and  between  Buffalo  and  New  York  by  rail  than  upon 
the  same  traffic  between  Chicago  and  Philadelphia  or  Baltimore  by 
lake-and-rail  via  the  other  lake  ports,  aside  from  supporting  the  all- 
rail  differentials  in  the  effort  to  parcel  out  a  division  of  the  traffic  be- 
tween the  several  ports? 

While  the  rail  haul  from  Erie  or  Fairport  to  the  Atlantic  ports  is 
greater  than  from  Buffalo  the  lake  haul  to  Erie  or  Fairport  is  corre- 
spondingly less  than  to  Buffalo.  This  question  can  not  be  determined 
upon  the  basis  of  distance  alone.  If  it  were,  Baltimore  would  be  given 
more  advantage  than  it  now  has.  The  interests  of  all  concerned  and 
the  matter  of  lawful  and  controlling  competition  must,  as  will  appear, 
be  considered. 

The  great  bulk  of  the  high-class  tonnage  moves  through  the  port 
of  New  York,  and  that  moving  through  the  other  ports  is  largely  the 
heavier  low-grade  commodities,  such  as  grain,  flour,  ores,  burlap,  coal, 
etc.  It  appears  both  in  the  previous  record  and  in  this  that  a  small 
difference  in  the  freight  charges  on  grain  determine  the  port  or  market 
to  which  it  will  go  and  affect  the  price  of  the  grain.  A  New  York 
grain  exporter  testified  that  he  could  not  export  from  New  York  in 
competition  with  Baltimore.  "When  asked  by  counsel  for  Baltimore 
interests  why  in  that  case  he  did  not  ship  from  Baltimore,  he  replied, 
referring  to  a  rule  of  the  Baltimore  Board  of  Trade  which  [72]  im- 
poses a  penalty  upon  shipments  made  by  others  than  the  members  of 
that  board : 

Because  we  can  not  ship  from  Baltimore  and  pay  you  gentlemen  down  there  a 
commission  for  handling  our  grain. 

Apparently  the  steamship  companies  prefer  to  handle  the  heavy 
traffic  through  Baltimore  or  Philadelphia,  and  they  adjust  their  rates 
with  that  in  view.  To  some  degree,  at  least,  the  inland  differentials 
contribute  to  that  result.  In  1881  Mr.  Albert  Fink,  then  commissioner 
of  the  trunk  lines,  stated  in  a  report  (ante,  p.  5)  on  this  subject: 

Whether  the  differentials  are  maintained  or  not  free  ocean  competition  acts  at 
least  m  a  great  measure  as  an  equalizer  of  the  through  rates. 


CHAMBER  OF  COMMERCE  OF  N.  Y.  V.  N.   Y.  C.  &  H.  R.  R.  CO.,  ET  AL.       397 

If  this  is  not  true,  manifestly  it  ought  to  be.  And  if  the  inland 
rates  are  free  from  artificial  adjustment  the  steamship  lines  must  com- 
pete on  the  ocean. 

Witnesses  testif}^  that  generall}-  ocean  rates  from  foreign  ports  to 
Boston,  Philadelphia,  and  Baltimore  are  lower  than  to  New  York,  and 
that  the  ocean  rates  from  the  various  ports  to  a  given  foreign  port  are 
such  as,  in  some  instances,  make  it  impossible  to  move  the  traffics 
through  New  York.  It  seems  that  rates  from  foreign  destinations  to 
the  out-ports  are  generally  so  much  per  100  pounds,  while  to  New 
York  they  are  on  a  measurement  or  space  basis,  which  makes  an  exact 
comparison  difficult,  if  not  impossible.  In  many  instances  the  ocean 
rates  from  the  out-ports  are  lower  than  from  New  York,  although  in 
other  instances  they  are  higher.  One  witness  testifies  "last  year  as 
well  as  this  year  the  steamship  lines  from  the  United  Kingdom  have 
made  the  same  rates  to  New  York  as  to  the  out-ports  in  most  cases. ' ' 
It  appears  that  whenever  there  is  a  readjustment  of  the  inland  rates 
the  steamship  lines  take  up  the  shrinkage  by  adjusting  their  rates  to 
and  from  the  several  ports. 

In  January,  1902,  a  number  of  the  ocean  carriers  entered  into  a 
minimum  freight  agreement  not  to  contract  for  carriage  by  steamships 
under  their  control  any  shipments  of  the  commodities  named  in  the 
agreement  from  the  United  States  or  Canada  to  ports  in  Great  Britain 
or  Ireland  at  lower  rates  of  freight  than  those  specified,  and  that  they 
would  not  make  or  allow  made  au}^  rebate  to  shippers  or  consignees. 
This  agreement  was  made  in  Liverpool  and  gave  no  recognition  to 
the  inland  freight  differentials  in  the  United  States.  It  was  to  stand 
for  14  days,  at  which  time  any  party  thereto  might  withdraw,  and  such 
withdrawal  would  release  the  others. 

In  ]\Iarch,  1902,  the  parties  to  the  agreement  resolved  that  the  bene- 
fits of  the  minimum  rates  should  be  maintained,  but  that  owing  to  dif- 
ferentials on  inland  rates,  insurance  rates,  differences  in  steamer  hauls, 
etc.,  it  was  desirable  to  elaborate  and  revise  the  agreement,  [73]  and  a 
committee  was  appointed  for  that  purpose.  This  committee  reported 
about  a  month  later,  and  a  majority  were  in  favor  of  adjustment  of 
ocean  rates  by  taking  the  inland  differentials  into  account. 

We  pause  here  to  remark  that  the  adjustment  of  inland  differentials 
to  compensate  the  ocean  disabilities,  followed  by  an  adjustment  of 
ocean  rates  which  takes  into  consideration  the  inland  differentials, 
would  constitute  an  endless  chain  or  be  tantamount  to  moving  about 
in  a  circle. 

In  May,  1902,  a  report  of  the  committee  was  adopted  which  fixed 
certain  minimum  ocean  rates  on  a  number  of  commodities.     The  vari- 


398  ATLANTIC    PORT   DIFFERENTIALS 

Oils  ports  were  grouped  together  under  the  same  rates  as  follows :  New 
York,  Boston,  and  Portland;  ]\Iontreal,  Quebec,  and  Philadelphia; 
Baltimore  and  Newport  News.  This  schedule  was  to  stand  for  a  trial 
period  of  3  weeks,  and  was  afterwards  extended  subject  to  14  daj^s' 
notice  of  withdrawal.  In  June,  1902,  withdrawal  of  certain  commodi- 
ties and  trafSc  began,  and  in  an  effort  to  preserve  the  agreement  the 
committee  in  July  recommended  concessions  on  certain  commodities  to 
the  ports  of  Philadelphia  and  Baltimore  which  amounted  to  about  one- 
half  of  the  inland  differentials  to  those  ports.  Thereupon  notice  of 
withdrawal  from  the  agreement  was  recalled. 

In  July,  1903,  on  a  request  that  the  steamship  lines  from  Philadel- 
phia, Baltimore,  and  Newport  News  advance  their  rates  to  equalize 
through  rates  with  Boston,  it  was  agreed  that  the  minimum  ocean  rates 
on  flour  to  Liverpool  originating  in  differential  territory  should  be : 
From  Boston,  New  York,  and  Portland,  8.44 ;  from  Quebec  and  Mon- 
treal, 30.44;  from  Philadelphia,  Baltimore,  and  Newport  News,  9.44. 
For  September  shipments  the  rates  were  to  be :  From  New  York, 
8.44;  from  Philadelphia,  9.44;  from  Baltimore,  9.94. 

The  effort  to  maintain  any  permanent  agreement  among  the  ocean 
lines  appears  to  have  failed  because  of  the  insistence  of  one  of  the  Bal- 
timore lines  upon  lower  rates  from  and  to  Baltimore. 

The  territory  contiguous  or  local  to  the  several  ports  would  afford 
each  of  them  control  of  more  or  less  of  the  export  and  import  traffic, 
and  in  the  competitive  territory  much  of  the  traffic  is  so  controlled 
by  the  originating  or  delivering  lines  that  it  would  naturally  move  to 
such  port  as  they  prefer.  One  importer  testified  that  he  had  found 
the  service  through  Baltimore  more  satisfactory  and  that  even  on 
equal  rates  he  would  not  use  the  port  of  New  York.  Each  port  has 
certain  attractions  for  particular  classes  of  traffic,  and  it  appears  that 
the  heavier  commodities  can  be  handled  more  economically  and  expe- 
ditiously at  some  of  the  out-ports  than  at  New  York.  Ocean-going 
steamers  can  be  loaded  with  grain  directly  from  the  elevators  at  Balti- 
more. A  great  part,  if  not  all,  of  the  traffic  has  to  be  lightered  at  New 
York. 

[74]  The  Baltimore  interests  assert  that  in  the  former  hearing  it 
was  shown  that  Baltimore  was  the  only  one  of  these  ports  that  was  on  a 
natural  rate  adjustment,  inasmuch  as  the  domestic  rates  and  the  inland 
rates  on  export  traffic  through  Baltimore  were  the  same,  while  at  the 
other  ports  the  export  rates  were  lower  than  the  domestic  rates,  and 
that  from  this  it  follows,  as  appeared  in  the  former  hearing,  that  the 
export  rates  to  Baltimore  can  not  be  advanced  without  at  the  same 
time  advancing  the  domestic  rates. 


CHAMBER  OP  COMMERCE  OF  N.  Y.  V.  N.  Y.  C.  &  H.  R.  R.  CO.,  ET  AL.       399 

Under  the  tariffs  now  in  effect  the  domestic  and  export  all-rail  class 
rates  from  Chicago  are  the  same,  respectively,  to  New  York,  Philadel- 
phia, and  Baltimore,  and  the  export  rates  to  Boston  are  lower  than  the 
domestic  rates.  The  export  rates  on  grain  are  lower  than  on  domestic 
shipments  to  the  several  ports  as  follows :  Boston,  5  cents ;  New  York, 
3  cents;   Philadelphia,  2  cents;   Baltimore,  II/2  cents. 

In  the  former  hearing  the  Commission  found  that  the  cost  of  deliv- 
ering grain  into  the  hold  of  a  ship  from  the  average  point  of  origin  was 
approximately  3  cents  less  at  Baltimore  than  at  New  York.  The  dif- 
ferential in  favor  of  Baltimore  is  iy2  cents. 

It  is  clear  that  the  differential  agreement  was  originally  made  in 
an  attempt  to  equalize  the  total  charges  on  import  and  export  traffic 
through  the  several  ports,  as  gateways.  We  have  no  jurisdiction  of 
the  ocean  rates  and  must  deal  with  this  question  as  though  the  ports 
were  destinations  instead  of  gateways.  This  does  not  mean  that  the 
carriers  may  not  take  into  consideration  the  previous  or  further  trans- 
portation of  the  traffic  on  the  ocean  and  thus  differentiate  it,  reasona- 
bly, from  domestic  traffic,  but  the  rates  to  and  from  the  ports  must  be 
reasonable,  must  be  published  as  independent  from  the  ocean  transpor- 
tation, and  are  subject  to  all  of  the  provisions  of  the  act :  Cosmopolitan 
Shipping  Co.  v.  Hamburg- Atnerican  Packet  Co.,  13  I.  C,  C.  266; 
Armour  Packing  Co.  v.  TJ.  8.,  209  U.  S.  56.  It  is  our  duty  to  see  that 
shippers  are  accorded  reasonable  rates  and  that  undue  discrimination 
is  not  practiced  against  shippers,  commodities,  or  communities.  It  is 
also  our  duty  to  consider  the  interests  of  all  of  the  shippers  and  com- 
munities affected  and  to  refrain  from  condemning  discriminations 
which  are  not  unjust.  J\Iuch  weight  has  always  been  given  to  rate  ad- 
justments of  long  standing  to  which  commercial  conditions  have  ad- 
justed themselves,  and  in  this  connection  it  is  to  be  noted  that  Balti- 
more and  Philadelphia  have  had  lower  rates  than  New  York  for  more 
than  40  years. 

Each  railroad  was  originally  constructed  to  reach  certain  points  and 
to  serve  certain  territories,  and  they  have  expanded  by  construction, 
purchase,  and  lease  of  other  lines  as  it  has  seemed  to  their  interests  to 
do.  Each  of  them  owes  a  duty  to  the  entire  public  and  each  of  them 
owes  a  peculiar  duty  to  the  persons  and  communities  [75]  which  it  di- 
rectly serves  and  which  are  dependent  upon  it.  In  addition  to  serving 
the  places  and  territories  directly  reached  by  it,  each  system  endeavors 
to  increase  its  total  revenues  by  securing  as  much  competitive,  traffic 
as  is  possible. 

It  is  urged  that  Boston  is  as  dependent  as  is  Philadelphia  or  Balti- 
more upon  the  differential  territory  for  its  exports  and  imports,  and 


400  ATLANTIC    PORT   DIFFERENTIALS 

the  Boston  interests  join  in  the  contention  that  the  railroads  should 
so  adjust  their  rates  as  to  insure  movement  of  a  certain  or  substantial 
part  of  the  traffic  through  those  ports.  Neither  the  carriers  nor  the 
Commission  has  any  right  to  undertake  to  so  apportion  the  traffic  be- 
tween rival  ports  or  cities.  While  recognizing  the  right  of  the  carriers 
to  conserve  the  interests  of  the  ports  and  territories  served  by  them, 
we  can  not  consider  the  carriers  as  one  great  and  single  system :  In- 
vestigation and  Suspension  Docket  No.  26,  22  I.  C.  C.  604. 

The  Baltimore  &  Ohio  and  the  Pennsylvania  systems,  reaching  by 
their  own  lines  so  many  of  the  important  commerciar centers  in  the 
middle  west  and  so  many  of  the  lake  ports  and  having  their  own  boats 
on  the  lakes  and  hauling  all  of  their  New  York  traffic  through  either 
Philadelphia  or  Baltimore  or  both,  control  the  rate  situation  between 
the  territory  here  considered  and  Baltimore  and  Philadelphia.  The 
competitive  conditions  at  Baltimore  and  Philadelphia  are  created  by 
these  systems,  and  the  rate  situation  to  and  from  those  ports  is  con- 
trolled by  them.  It  Avas  this  control  by  these  systems  that  led  to  the 
making  of  the  differential  agreement.  We  do  not  recognize  such  an 
agreement  as  lawful,  but  the  conditions  which  brought  it  about  are  as 
strong  to-day  as  they  ever  were  and  we  find  now,  as  we  found  in  the 
North  Atlantic  Ports  case,  supra,  that  the  Pennsylvania  and  the  Balti- 
more &  Ohio  have  the  lawful  right  to  maintain  lower  rates  to  and  from 
Baltimore  and  Philadelphia  than  they  contemporaneously  maintain  to 
and  from  New  York.  They  would  probably  also  have  the  right  to 
make  these  rates  the  same  to  and  from  all  of  those  ports  if  they  chose 
to  do  so. 

The  Boston  lines  have  an  undoubted  right  to  make  such  rates  to  and 
from  Boston  as  their  interests  demand,  subject  only  to  the  limitations 
that  the  rates  must  be  reasonable ;  that  they  may  not  carry  that  traffic 
at  less  than  the  cost  of  the  service  and  so  unduly  burden  other  traffic, 
and  may  not  unjustly  discriminate  against  other  points  which  they 
serve  or  in  whose  traffic  they  participate.  The  New  York  Central  and 
the  Erie,  having  their  own  lines  from  Chicago  and  Buffalo  to  New 
York  and  no  lines  to  Philadelphia,  Baltimore,  or  Boston,  have  a  right 
to  make  their  rates  to  and  from  New  York  as  they  choose,  subject  to 
the  same  limitations.  The  Lehigh  Valley  and  the  Lackawanna  directly 
serve  New  York,  and,  through  established  connections,  serve  also  Phila- 
delphia and  Baltimore.  Thej^,  of  course,  may  not  vmjustly  discrimi- 
nate against  either  of  these  ports. 

[76]  If  the  New  York  lines  and  other  connections  of  the  Baltimore 
&  Ohio  and  the  Pennsylvania  systems  participate  in  the  haul  of  traffic 
to  and  from  Philadelphia  or  Baltimore,  they  must  do  so  under  the 


CHAMBER  OP  COMMERCE  OF  N.  Y.  V.  N.  Y.  C.  &  H.  R.  R.  CO.,  ET  AL.       401 

competitive  conditions  created  by  the  Baltimore  &  Ohio  and  the  Penn- 
sylvania at  Baltimore  and  Philadelphia  which  the  other  lines  are  unable 
to  control,  and  under  these  conditions  we  do  not  think  it  unlawful  if 
they  participate  in  the  movement  of  traffic  to  and  from  Philadelphia 
and  Baltimore  under  competitive  rates  even  though  at  the  same  time 
they  maintain  higher  rates  to  and  from  New  York:  Railroad  Commis- 
sion of  Kansas  v.  A.,  T.  cO  aS'.  F.  By.  Co.,  22  I.  C.  C.  407 ;  Indianapolis 
Freight  Bureau  v.  C,  C,  C.  d'  St.  L.  Ry.  Co.,  23  I.  C.  C.  195. 

As  to  lake  and  rail  traffic  through  Buffalo  and  ex-lake  traffic  from 
Buffalo,  the  distance  and  the  service  via  the  short  lines  is  substantially 
the  same  to  Baltimore  and  to  New  York,  but  if  the  New  York  lines  were 
to  withdraw  from  participation  in  that  traffic  to  and  from  Baltimore 
or  Philadelphia,  it  could  and  doubtless  would  move  in  the  same  volume 
via  the  other  lines,  and,  in  any  event,  that  which  reaches  Buffalo  must 
move  there  in  competition  with  the  other  lake  ports,  such  as  Erie,  Fair- 
port,  etc. 

The  theory  of  the  law  is  that  carriers  shall  establish  and  maintain 
through  routes  and  joint  rates  so  that  there  may  be  the  freest  move- 
ment of  traffic  without  the  necessity  of  reshipment.  In  the  formation 
of  these  through  routes,  however,  the  law  recognizes  the  right  of  a 
carrier  to  protect  its  own  long  haul,  and  a  carrier  may  not  be  required 
against  its  will  to  participate  in  a  through  route  between  any  two 
points  which  does  not  include  all  or  substantially  all  of  its  line  or  lines 
between  those  points,  except  when  an  unreasonably  long  or  circuitous 
route  would  otherwise  be  created.  The  law  also  recognizes  the  right 
of  the  shipper  to  dictate  the  intermediate  routing  of  his  shipments  over 
available  through  routes.  We  therefore  think  that  it  is  not  unlawful 
and  not  unjustly  discriminatory  against  New  York  for  the  carriers 
which  serve  it  to  participate  in  the  competitive  traffic  to  Philadelphia 
and  Baltimore  at  the  lower  rates  fixed  at  those  points  by  the  carriers 
whose  lines  control  those  situations. 

As  before  stated  we  neither  recognize  nor  consider  the  differential 
agreement  as  lawful.  The  law  contemplates  free  competition  and  con- 
demns any  combination  which  restrains  such  competition.  We  repeat 
that  defendants  Baltimore  &  Ohio  and  Pennsylvania  s.ystems  have  a 
lawful  right  to  maintain  lower  rates  between  this  differential  territory 
and  Baltimore  and  Philadelphia  than  they  contemporaneously  main- 
tain to  and  from  New  York.  The  New  York  lines  and  their  connec- 
tions have  a  right  to  meet  the  competition  so  created  at  Philadelphia 
and  Baltimore  and  which  is  beyond  their  control,  while  [77]  at  the 
same  time  maintaining  higher  rates  to  and  from  New  York.  We  think 
that  as  to  this  traffic,  it  would  not  be  unjustly  discriminatory  for  de- 
26 


402  ATLANTIC    PORT    DIFFERENTIALS 

fendants  to  maintain  the  same  rates  to  and  from  New  York  and  Bos- 
ton. We  are  not  to  be  understood  as  holding  that  the  present  rate 
adjustment  will  for  all  time  or  for  any  particular  period  of  time  be 
just  and  reasonable,  but  we  can  not  find  that  reasonable  differences  in 
rates  as  between  Philadelphia  and  Baltimore  on  the  one  hand  and  New 
York  on  the  other  hand  unjustly  discriminate  against  New  York.  We 
find  no  justification  for  lower  rates  to  and  from  Boston  than  to  and 
from  New  York, 

We  are  of  the  opinion : 

(a)  That  differentials  under  New  York  on  all-rail  and  lake-and-rail 
export  shipments  from  differential  territory  to  Baltimore  should  not 
exceed  3  cents  per  100  pounds,  and  to  Philadelphia  should  not  exceed 
2  cents  per  100  pounds,  on  the  classes  and  on  commodities  other  than 
grain.  On  all-rail  and  lake-and-rail  export  shipments  of  grain  the 
differentials  under  New  York  should  not  exceed  1.5  cents  per  100 
pounds  to  Baltimore,  and  1  cent  per  100  pounds  to  Philadelphia. 

(6)  That  as  to  all  of  this  traffic  the  export  rates  to  Boston  should 
not  be  lower  than  to  New  York. 

(c)  That  the  differentials  under  New  York  from  Buffalo,  N.  Y., 
Erie,  Pa.,  and  West  Fairport,  Ohio,  to  Baltimore  and  Philadelphia  on 
ex-lake  grain  from  differential  territory  for  export  should  not  exceed 
0.2  of  a  cent  per  bushel  on  barley  and  oats,  and  0.3  of  a  cent  per  bushel 
on  wheat,  corn,  and  rye. 

(d)  That  differentials  under  New  York  on  import  trafific,  all-rail 
and  lake-and-rail,  from  Philadelphia  and  Baltimore  to  differential 
territory  should  be  no  greater  than  those  which  existed  in  the  latter 
part  of  1908,  to  wit,  in  cents  per  100  pounds : 

Classes    1         2         3         4         5         6         Commodities. 

Philadelphia  differentials 6         6         2         2         2         2  2 

Baltimore  differentials    8  8  3  3  3  3  3 

And  that  the  import  rates  from  Boston  should  not  be  lower  than  from 
New  York. 

On  the  understandings  and  submission  filed  in  In  the  Matter  of  Im- 
port Rates,  24  I.  C.  C.  78  {post,  p.  403),  heard  in  connection  with  this 
case,  we  understand  that  defendants  will  promptly  adjust  their  rates 
in  conformity  with  these  views,  and  therefore  no  order  will  now  be  is- 
sued. 

The  case  will  be  held  open  for  the  entry  of  such  order  as  may  here- 
after be  found  necessary. 


IN  THE  MATTER  OF  IMPORT  RATES. 
24  I.  C.  C.  78. 


408 


IN  THE  MATTER  OF  IMPORT  RATES. 

Decided  June  4,  1912. 
(24  I.  C.  C.  78.) 

For  reasons  given  in  Chamber  of  Commerce  case,  ante,  page  377,  Philadelphia  and 
Baltimore  allowed  certain  differentials  under  New  York  on  import  traffic,  but 
held  that  the  import  rates  from  Boston  should  be  the  same  as  from  New  York. 

William  M.  Coates  for  Philadelphia  trade  bodies. 

A.  8.  Crane  and  Edgar  J.  Bich  for  Boston  &  Maine  Railroad. 

J.  B.  Thayer,  George  D.  Dixon,  and  George  Stuart  Patterson  for 
Pennsylvania  Railroad  Company. 

Charles  S.  Hamlin  and  D.  0.  Ives  for  Boston  Chamber  of  Commerce. 

George  F.  Randolph,  W.  Irvhie  Cross,  Hugh  L.  Bond,  Jr.,  Robert  B. 
Ways,  and  C.  8.  WigJit  for  Baltimore  &  Ohio  Railroad  Company. 

Robert  Ramsay  for  commercial  bodies  of  Baltimore. 

Frank  L.  Neall  for  joint  committee  of  trade  bodies  of  Philadelphia. 

C.  F.  Daly,  Clyde  Brown,  Chas.  C.  Paulding,  and  W.  8.  Kalhnan  for 
New  York  Central  lines. 

N.  B.  Kelly  for  Philadelphia  Chamber  of  Commerce. 

John  F.  Auch  and  Charles  Heeiner  for  Philadelphia  &  Reading 
Railway  Company. 

T.  N.  Jarvis  and  Walter  T.  Moore  for  Lehigh  Valley  Railroad  Com- 
pany. 

Harry  E.  Belles  for  United  Business  Men's  Association  of  Philadel- 
phia. 

Arthur  Geo.  Brown  and  John  B.  Daish  for  Baltimore  Chamber  of 
Commerce  and  Board  of  Trade  of  city  of  Baltimore. 

W.  L.  Divine  and  A.  P.  Gilbert  for  Chesapeake  &  Ohio  Railway  Com- 
pany. 

Philip  Godley  for  Philadelphia  Board  of  Trade. 

John  C.  Howard  for  S.  E.  Comstock  &  Company. 

James  Collins  Jones  for  Philadelphia  Board  of  Trade,  Philadelphia 
Chamber  of  Commerce,  Commercial  Exchange  of  Philadelphia,  and 
Philadelphia  Maritime  Exchange. 

James  L.  King  for  Commercial  Exchange  of  Philadelphia. 

E.  J.  Lavina  for  Philadelphia  Board  of  Trade. 

[79]  Ottmar  Marcus  for  Old  Town  Merchants  &  Manufacturers'  As- 
sociation of  Baltimore. 

Wm.  A.  Porcher  for  Trunk  Line  Association. 

405 


406 


ATLANTIC    PORT   DIFFERENTIALS 


P.  D.  Todd  and  P.  F.  Young  for  Philadelphia  IMaritime  Exchange. 

Andrew  C.  Trippe  and  James  McC.  Trippe  for  Merchants'  &  Manu- 
facturers' Association  of  Baltimore. 

Herbert  Sheridan  for  Baltimore  Chamber  of  Commerce. 

B.  D.  Caldwell,  J.  L.  Seager,  and  John  II.  Crawford  for  Delaware, 
Lackawanna  &  Western  Railroad  Company. 


REPORT  OF  THE  COMMISSION. 

Clark,  Commissioner: 

In  1908,  and  for  a  period  prior  thereto,  the  inland  import  rates  on 
shipments  destined  to  points  in  the  so-called  "differential  territory" 
from  the  several  ports  were,  taking  Chicago  as  illustrative,  as  follows, 
in  cents  per  100  pounds : 


All-rail ;    classes. 

Lake-and-rail ; 
classes. 

1 

70 
75 
69 
67 

2 

61 
65 
59 

57 

3 

47 

50 

48 
47 

4 

33 
35 
33 
32 

5 

28 
30 
28 
27 

6 

1 

57 
62 
56 
54 

2 

50 
54 
48 
46 

3 

38 
41 
39 
38 

4 

27 
30 
28 
27 

5 

23 
25 
23 
22 

6 

Boston     

23% 
25 
23 
22 

90 

New  York 

Philadelphia    

Baltimore 

21 
19 
18 

Under  commodity  rates,  all-rail  and  lake-and-rail,  Baltimore  and 
Philadelphia  had  differentials  under  New  York,  respectively,  of  3  cents 
and  2  cents  per  100  pounds. 

Early  in  1909  the  Boston  roads  reduced  these  rates  and  that  action 
was  followed  by  corresponding  reductions  from  the  other  ports.  Still 
further  reduction  was  made  from  Boston,  and  that  also  was  met  by  the 
lines  from  the  other  ports. 

As  a  means  of  terminating  the  rate  war  thus  inaugurated,  the  rail- 
j'oads  serving  the  ports  of  Boston,  New  York,  Philadelphia,  and  Balti- 
more and  the  commercial  bodies  of  Boston,  Philadelphia,  and  Balti- 
more requested  the  Commission  in  May,  1910,  to  decide  or  advise  as  to 
the  adjustment  of  the  inland  import  rates  from  the  several  ports,  (o), 
temporarily,  until  the  Commission  could  render  a  final  decision ;  and 
{h),  finally,  after  full  hearing  and  investigation. 

Under  submission  {a)  the  Commission  decided  that  temporarily  the 
inland  import  rates  from  Boston,  Philadelphia,  and  Baltimore  should 
be  lower  than  from  New  York,  and  the  same  as  then  applied  from  Bal- 
timore. 

Shortly  thereafter,  complaint  was  filed  by  the  New  York  interests 
alleging  unreasonable  import  and  export  rates  to  and  from  New  [80] 
York  and  unjust  discrimination  against  New  York  in  the  maintenance 


i 


IN  THE  MATTER  OP  IMPORT  RATES  407 

of  lower  export  and  import  rates  to  and  from  Baltimore,  Philadelphia, 
and  Boston,  These  two  eases  were  heard,  briefed,  and  argued  together 
and  the  conclusions  of  the  Commission  have  been  announced  in  Cham- 
ber of  Commerce  of  the  State  of  Neiv  York  v.  N.  Y.  C.  tfc  H.  R.  R.  R. 
Co.,  24  I.  C.  C.  55  {ante,  p.  377).  Those  conclusions  are  controlling  in 
the  instant  ease. 

We  are  therefore  of  the  opinion  that  differentials  under  New  York 
on  this  traffic,  all-rail  or  lake-and-rail,  from  Philadelphia  and  Balti- 
more should  be  the  same  as,  and  in  no  event  greater  than,  those  which 
existed  in  the  latter  part  of  1908,  to  wit,  in  cents  per  100  pounds: 

Classes    1         2         3         4         5         6         Commodities. 

Philadelphia  differentials   6         6         2         2         2         2  2 

Baltimore  differentials    8         8         3         3         3         3  3 

and  that  the  import  rates  from  Boston  should  be  the  same  as  from 
New  York. 


CHAMBER  OF  COMMERCE  OF  THE  STATE  OF  NEW  YORK, 

ET  AL., 

V. 

NEW  YORK  CENTRAL  &  HUDSON  RIVER  RAILROAD  COM- 
PANY, ET  AL. 

24  I.  C.  C.  674. 


409 


CHAMBER   OF   COMMERCE   OF   THE   STATE   OF   NEW   YORK,    ET   AL., 

V. 
NEW  YORK   CENTRAL   &   HUDSON  RH^R  RAILROAD   COMPANY,   ET  AL. 

Decided  October  14,  1912. 

(24  1.  C.  C.  674.) 

Prior  decision  herein,  in  regard  to  import  rates  from  Boston  and  New  York  and 
rates  over  certain  ditferential  lines,  explained  and  modified. 

Appearances  same  as  in  original  report  {ante,  p.  377). 

SUPPLEMENTAL  REPORT  OF  THE  COMMISSION. 

Clark,  Commissioner: 

The  original  report  in  this  case  is  in  24  I.  C.  C.  55  {ante,  p.  377). 
No  order  was  entered.  It  now  appears  from  further  investigation  that 
some  modification  of  the  original  findings  is  proper  and  necessary. 

At  page  77  of  the  original  report  {ante,  p.  402),  we  said: 

We  are  of  the  opinion  that  differentials  under  New  York  on  all-rail  and  lake-and- 
rail  export  shipments  from  differential  territory  to  Baltimore  should  not  exceed  3 
cents  per  100  pounds,  and  to  Philadelphia  should  not  exceed  2  cents  per  100  pounds 
on  the  classes  and  commodities  other  than  grain.  On  all-rail  and  lake-and-rail  ex- 
port shipments  of  grain  the  differentials  under  New  York  should  not  exceed  1.5 
cents  per  100  pounds  to  Baltimore  and  1  cent  per  100  pounds  to  Philadelphia. 

It  was  not  the  intention  to  change  the  differentials  on  flour  for  ex- 
port. Nothing  was  said  in  the  hearings  as  to  export  rates  on  iron  ar- 
ticles, and  it  was  not  intended  to  change  the  differentials  thereon. 
That  portion  of  the  original  report  above  quoted  is  therefore  hereby- 
modified  so  that  it  will  read  : 

We  are  of  the  opinion  that  differentials  under  New  York  on  all-rail  and  lake- 
and-rail  export  shipments  from  differential  territory  to  Baltimore  should  not  exceed 
3  cents  per  100  pounds,  and  to  Philadelphia  should  not  exceed  2  cents  per  100 
pounds,  on  the  classes  and  on  commodities  other  than  grain,  flour,  and  iron  articles. 
On  all-rail  and  lake-and-rail  shipments  of  grain  the  differentials  under  New  York 
should  not  exceed  1.5  cents  per  100  pounds  to  Baltimore  and  1  cent  per  100  pounds 
to  Philadelphia.  On  all-rail  and  lake-and-rail  export  shipments  of  flour  the  dif- 
ferentials under  New  York  should  not  exceed  2  cents  per  100  pounds  to  Baltimore 
and  1  cent  per  100  pounds  to  Philadelphia. 

[675]  The  present  export  differentials  on  iron  and  steel  articles,  under  New 
York  to  Baltimore  and  Philadelphia,  respectively,  from  representative  points  are 
generally  as  follows:  From  Chicago  and  Chicago  rate  points,  to  Baltimore  3  cents 
per  100  pounds  where  rates  are  stated  per  100  pounds,  and  60  cents  per  ton,  net  or 
gross,  where  rates  are  stated  per  ton ;  to  Philadelphia,  2  cents  per  100  pounds 
where  rates  are  stated  per  100  pounds,  and  40  cents  per  ton,  net  or  gross,  where 
rates  are  stated  per  ton.  From  Detroit  and  points  taking  the  same  rates,  to  Balti- 
more, 3  cents  per  100  pounds  where  rates  are  stated  per  100  pounds,  and  55  cents 

411 


412  ATLANTIC    PORT    DIFFERENTIALS 

per  ton  net  or  gross,  where  rates  are  stated  per  ton ;  to  Philadelphia,  2  cents  per 
100  pounds  where  rates  are  stated  per  100  pounds,  and  40  cents  per  ton,  net  or 
gross,  where  rates  are  stated  per  ton.  From  Pittsburgh  and  points  taking  the 
same 'rates,  from  Cleveland  and  points  taking  the  same  rates,  and  from  Youngs- 
town  and  points  taking  the  same  rates,  to  Baltimore,  1.5  cents  per  100  pounds 
where  rates  are  stated  per  100  pounds,  and  30  cents  per  ton,  net  or  gross,  where 
rates  are  stated  per  ton;  to  Philadelphia,  1  cent  per  100  pounds  where  rates  are 
stated  per  100  pounds,  and  20  cents  per  ton,  net  or  gross,  where  rates  are  stated 
per  ton.     These  differentials  should  not  be  exceeded. 

There  are  other  points  of  minor  importance  from  which  the  export  differentials 
on  iron  and  steel  articles  are  somewhat  different  from  those  which  we  have  named. 
Without  specifying  such  points,  it  is  sufficient  to  say  that  those  differentials  should 
not  be  made  greater  than  they  are. 

In  the  original  report,  page  77,  we  found  that  the  import  rates  from 
Boston  should  not  be  lower  than  from  New  York,  and  in  In  the  Matter 
of  Import  Rates,  24  I.  C.  C.  78  {ante,  p.  403),  we  decided  that  they 
should  be  the  same.  We  are  now  asked  as  to  what  import  rates  should 
apply  from  Boston, "in  view  of  the  fact  that  there  are  certain  differen- 
tial lines,  respectively,  from  Boston  and  New  York. 

The  standard  all-rail  rates  from  New  York  are  the  same  on  both  do- 
mestic and  import  shipments.  The  same  is  true  as  to  the  standard 
rail-and-lake  rates  and  as  to  the  ocean-rail-and-lake  rates  via  New 
London,  Conn.,  and  the  Canada  Atlantic  lines.  The  standard  all-rail 
domestic  rates  from  Boston  are  the  same  as  from  Ncav  York,  and  the 
same  is  true  as  to  the  standard  rail-and-lake  domestic  rates.  The  do- 
mestic ocean-and-rail  rates  from  Boston  via  Philadelphia,  Baltimore, 
Norfolk,  or  Newport  News  are  higher  than  the  domestic  ocean-and-rail 
rates  from  New  York  via  Norfolk  or  Newport  News. 

Adhering  to  our  original  finding  as  to  the  general  relationship  of 
import  rates  from  Boston  and  New  York,  but  modifying  and  giving 
more  specific  application  thereto,  we  hold  that  via  the  standard  all-rail 
lines,  the  standard  rail-and-lake  lines,  and  the  ocean-and-rail  lines  via 
Philadelphia,  Baltimore,  Norfolk,  or  Newport  News,  the  import  rates 
from  Boston  should  not  be  lower  than  from  New  York. 

There  is  a  differential  ocean-and-rail  route  from  New  York  via  New 
London,  Conn.,  and  the  Central  of  Vermont  and  Grand  Trunk  roads. 
Via  this  route  the  domestic  class  rates  to  Chicago  are  on  a  scale  of  65 
cents,  and  the  import  rates  are  on  a  scale  of  62  cents,  [676]  first  class. 
If  this  route  is  open  or  opened  to  import  traffic  from  Boston,  import 
rates  from  Boston  should  not  be  lower  than  from  New  York. 

There  is  a  differential  river-rail-and-lake  line  from  New  York  via 
the  Hudson  River,  the  Rutland  Railroad,  and  the  lakes.  There  is  no 
route  from  Boston  that  is  fairly  comparable  with  this  one.  Via  this 
route  the  domestic  and  import  class  rates  to  Chicago  are  on  a  scale 
of  52  cents,  first  class.     We  do  not  understand  that  this  route  is  open 


CHAMBER  OF  COMMERCE  OF  N.  Y.  V.  N.  Y.  C.  &  H.  R.  R.  CO.  413 

to  Boston  traffic,  but  if  it  should  be,  the  import  rates  from  Boston 
should  not  be  lower  than  from  New  York. 

There  is  a  differential  route  from  New  York,  river-canal-and-lake, 
via  the  Hudson  River,  the  Erie  Canal,  and  the  Lakes.  There  is  no 
similar  route  from  Boston.  Via  this  route  the  domestic  and  import 
class  rates  to  Chicago  are  on  a  scale  of  42  cents,  tirst  class.  We  do  not 
understand  that  this  route  is  open  to  Boston  traffic,  but  if  it  should  be, 
the  import  rates  from  Boston  should  not  be  lower  than  from  New  York. 

There  are  differential  rail  routes  from  Boston  via  the  Boston  &  Maine 
and  Boston  &  Albany  roads  in  connection  with  the  Canadian  Pacific 
and  National  Despatch  lines.  Via  these  routes  the  domestic  class  rates 
to  Chicago  are  on  a  scale  of  70  cents,  first  class,  and  at  the  present  time 
the  import  rates  are  the  same  as  from  Baltimore.  The  New  York, 
New  Haven  &  Hartford  and  Canadian  Pacific  Despatch  publish  the 
same  scale  of  import  rates,  but  not  the  same  domestic  scale. 

The  domestic  rates  via  the  Boston  &  Maine  and  Boston  &  Albany 
roads,  in  connection  with  the  Canadian  Pacific  and  National  Despatch 
lines,  being  on  a  recognized  differential  scale,  it  is  obvious  that  if  these 
routes  did  not  publish  any  import  rates  the  domestic  rates  would  be 
available  on  import  shipments  if  such  traffic  were  cleared  at  Boston. 
We  see  no  reason  for  imposing  that  additional  trouble  upon  the 
shippers  and  we  hold  that  via  these  routes  the  import  rates  from  Bos- 
ton may  be  the  same  as  the  domestic  rates. 

There  is  a  differential  rail-and-lake  route  from  Boston  via  the  Bos- 
ton &  Maine,  Grand  Trunk,  and  Canada  Atlantic  Transit  Company's 
lines  through  Depot  Harbor  which  publishes  domestic  class  rates  to 
Chicago  on  a  scale  of  57  cents,  first  class.  There  is  no  route  from  New 
York  that  is  exactly  comparable  with  this  one.  The  domestic  rates 
via  this  route  being  recognized  differentials  under  the  standard  rail- 
and-lake  rates,  Ave  see  no  reason  why  import  shippers  should  be  obliged 
to  clear  their  traffic  at  Boston  in  order  to  avail  themselves  thereof,  and 
we  hold  that  via  this  route  the  import  rates  from  Boston  may  be  the 
same  as  the  domestic  rates. 

[677]  All  that  we  have  said  as  to  the  relationship  of  import  rates  as 
between  New  York  and  Boston  applies  to  both  class  and  commodity 
rates. 

As  stated  in  the  original  report,  the  understandings  and  submission 
filed  in  In  the  Matter  of  Import  Bates,  supra,  were  relied  upon  to  bring 
about  a  prompt  adjustment  of  the  rates  in  conformity  with  the  views 
which  we  expressed,  and  no  order  was  issued.  As  hereinbefore  indi- 
cated, differences  of  opinion  arose  as  to  just  what  changes  it  was  in- 
tended to  effect.     It  was  not  possible  at  that  time  to  bring  the  matter 


414 


ATLANTIC    PORT   DIFFERENTIALS 


before  the  full  Commission,  and  the  parties  were  therefore  advised  to 
hold  the  readjustment  in  abeyance  until  the  Commission  could  give 
it  further  consideration.  We  understand  that  defendants  are  now 
prepared  to  adjust  the  rates  in  conformity  with  our  findings,  and  will 
therefore  not  now  enter  an  order.  It  is  a  common  practice  for  the 
shippers  to  make  yearly  contracts  with  ocean  steamship  lines  on  their 
import  traffic.  It  was  understood  in  In  the  Matter  of  Import  Rates, 
supra,  that  our  decision  would  not  fix  an  effective  date  that  would  in- 
terfere with  such  yearly  contracts.  Pursuant  to  that  understanding 
and  to  what  we  believe  to  be  the  best  interests  of  all  concerned,  we 
shall  now  expect  the  carriers  to  make  their  readjustments  under  our 
findings  effective  on  January  1.  1913,  and  on  not  less  than  15  days' 
notice  to  the  Commission  and  to  the  public  in  the  manner  required  by 
law. 


IN  THE  MATTER  OF  IMPORT  RATES. 
24  I.  C.  C.  678. 


415 


IN  THE  MATTER  OF  IMPORT  RATES. 

Decided  October  14,  1912. 

(24  1.  C.  C.  678.) 

Prior  decision   herein  modified  upon  the  findings  in  Chamber  of  Commerce  case, 

ante,  p.  377. 

Appearances  same  as  in  original  report  {ante,  p.  415). 

SUPPLEMENTAL  REPORT  OP  THE  COMMISSION. 

Clark,  Conitmssioner : 

The  original  report  in  this  case  is  in  24  I.  C.  C.  78.  We  there  held 
that  the  import  rates  from  Boston  should  be  the  same  as  from  New 
York.  Questions  were  raised  as  to  what  import  rates  should  apply 
from  Boston  in  view  of  the  fact  that  there  are  certain  differential  lines 
respectively  from  Boston  and  New  York.  It  was  not  possible  at  that 
time  to  bring  these  questions  before  the  full  Commission  and  the  par- 
ties were  therefore  advised  to  hold  the  readjustment  in  abeyance  until 
the  Commission  could  give  them  consideration. 

We  have  considered  this  question  in  supplemental  report  in  Chamber 
of  Commerce  of  the  State  of  Neiv  York  v.  N.  Y.  C.  &  H.  R.  R.  R.  Co., 
24  I.  C.  C.  674  {ante,  p.  409).  Applying  to  the  instant  case  findings 
there  made,  we  decide : 

(a)  That  via  the  standard  all-rail  lines  and  the  standard  rail-and- 
lake  lines  the  import  rates  from  Boston  should  be  the  same  as  from 
New  York. 

( h )  That  if  the  New  York  differential  ocean-and-rail  route  via  New 
London,  Conn.,  and  the  Central  of  Vermont  and  Grand  Trunk  roads 
is  open  or  opened  to  import  traffic  from  Boston,  the  import  rates  from 
Boston  should  be  the  same  as  from  New  York. 

(c)  That  via  the  differential  rail  routes  from  Boston  via  the  Boston 
&  Maine  and  Boston  &  Albanj^  roads  in  connection  with  the  Canadian 
Pacific  and  National  Despatch  lines,  the  import  rates  from  Boston  may 
be  the  same  as  the  domestic  rates. 

{d)  That  via  the  differential  rail-and-lake  route  from  Boston  via 
the  Boston  &  Maine,  Grand  Trunk,  and  Canada-Atlantic  Transit  Com- 
pany 's  lines  through  Depot  Harbor,  the  import  rates  from  Boston  may 
be  the  same  as  the  domestic  rates. 

[679]   All  that  we  have  said  as  to  the  relationship  of  import  rates  as 

27  417 


418  ATLANTIC   PORT   DIFFERENTIALS 

between  New  York  and  Boston  applies  to  both  class  and  commodity 
rates. 

For  the  reasons  stated  in  supplemental  report  in  Ckaml)er  of  Com- 
merce of  the  State  of  Neiv  York  v.  N.  Y.  C.  tf^  H.  R.  R.  R.  Co.,  supra, 
we  here  decide  that  the  readjustment  of  import  rates  in  accord  with 
our  findings  shall  be  made  effective  January  1,  1913,  and  on  not  less 
than  15  days'  notice  to  the  Commission  and  to  the  public  in  the  manner 
required  by  law. 


CHAMBER  OF  COMMERCE  OF  THE  STATE  OF  NEW  YORK, 

ET  AL., 

V. 

NEW  YORK  CENTRAL  &  HUDSON  RIVER  RAILROAD  COM- 
PANY, ET  AL. 

27  I.  C.  C.  238. 


419 


CHAMBER  OF  COMMERCE  OF  THE  STATE  OF  NEW  YORK,  ET  AL.., 

V. 
NEW  YORK  CENTRAL  &  HUDSON   RIVER  RAILROAD  COMPANY,  ET  AL. 

Decided  June  5,  1913. 

(27  I.  C.  C.  238.) 

After  exhaustive  consideration  of  all  the  matters  presented  on  the  rehearing  the 
Commission  is  of  the  opinion  that  the  conclusions  announced  in  the  original 
and  supplemental  reports  are  correct. 

B.  L.  Fairchild  for  complainants. 

C.  S.  Hamlin  for  commonwealth  of  Massachusetts  and  attorney- 
general  thereof,  port  directors  of  Boston,  Boston  Chamber  of  Com- 
merce, Boston  &  Maine  Railroad,  and  Boston  &  Albany  Railroad  Com- 
pany. 

Arthur  Geo.  Brown  and  John  B.  Daish  for  Baltimore  Chamber  of 
Commerce  and  Board  of  Trade  of  Baltimore. 

G.  S.  Patterson  for  Pennsylvania  Railroad  system. 

J.  C.  Jones  for  Philadelphia  Board  of  Trade,  Philadelphia  Chamber 
of  Commerce,  Commercial  Exchange  of  Philadelphia,  and  Philadelphia 
Maritime  Exchange. 

W.  I.  Cross  for  Baltimore  &  Ohio  Railroad  Company. 

A.  C.  Trippe  for  Merchants  &  Manufacturers'  Association  of  Balti- 
more. 

F.  L.  Neall  for  certain  commercial  interests  of  Philadelphia. 

J.  M.  Swift,  attorney-general,  for  commonwealth  of  Massachusetts 
and  port  directors  of  Boston. 

SUPPLEMENTAL   REPORT   OF   THE   COMMISSION   ON   REHEARING. 

Clark,  Chairman: 

The  original  and  supplemental  reports  in  this  case  are  at  24  I.  C.  C. 
55  and  674  {ante,  p.  377,  403).  Motion  for  rehearing  presented  by  the 
Boston  commercial  interests  and  the  Boston  &  Albany  and  Boston  & 
Maine  railroads  was  granted  on  the  sole  question  of  the  relationship  of 
the  inland  rates  on  import  shipments  destined  to  the  so-called  differ- 
ential territory,  as  between  Boston  and  New  York. 

[239]  In  the  original  report  we  held  that  the  import  rates  from  Bos- 
ton should  not  be  lower  than  from  New  York.  Tn  the  supplemental 
report  we  held  that  via  certain  differential  routes  from  Boston  which 

421 


422  ATLANTIC    PORT   DIFFERENTIALS 

carried  recognized  differential  rates  on  domestic  traffic,  the  import 
rates  need  not  be  higher  than  the  domestic  rates,  for  the  reason  that 
such  an  adjustment  would  simply  impose  upon  shippers  the  necessity 
of  clearing  their  import  shipments  at  Boston  in  order  to  ship  them 
under  the  lower  domestic  rates. 

In  the  petition  for  rehearing  one  error  is  pointed  out  in  that  one  of 
the  exhibits  filed  by  the  Baltimore  interests  was  referred  to  as  indicat- 
ing the  effect  upon  traffic  under  the  different  adjustments  as  between 
contending  ports,  when  in  fact  the  exhibit  covered  a  six  months '  period 
for  one  year  and  a  12  months'  period  for  another  year.  This  exhibit 
was  one  of  several  that  were  referred  to  in  our  report.  It  was  in  no 
sense  controlling,  and  correction  of  the  error  would  not  in  any  way 
affect  the  conclusions  reached. 

Petitioners  state  that  our  conclusion  that  lower  rates  from  Boston 
than  from  New  York  would  be  discriminatory  against  New  York  was 
"upon  the  express  finding  that  the  cost  of  the  additional  haul  from 
Boston  to  differential  territory  would  probably  offset  and  perhaps  ex- 
ceed the  additional  terminal  cost  at  New  York."     What  we  said  was: 

It  is  urged  that  the  cost  of  delivei'ing  export  traffic  to  and  taking  import  traffic 
from  steamships  at  New  York,  whicli  is  borne  by  the  railroads,  is  materially  greater 
than  at  Boston,  and  that  therefore  the  rates  to  and  from  Boston  should  be  less  than 
to  and  from  New  York.  This  suggestion  seems  to  ignore  the  probable  fact  that  the 
cost  of  the  additional  haul  to  and  from  Boston  would  perhaps  offset  and  perhaps 
exceed  the  additional  terminal  cost  at  New  York. 

In  the  rehearing  petitioners  show  that  the  carriers  from  New  York 
provide  in  their  tariffs  for  a  drayage  charge  from  piers  to  terminals 
of  80  cents  per  ton  on  certain  classes  of  freight,  and  $1.60  per  ton  on 
certain  other  higher  classes.  They  estimate  that  certain  other  services 
performed  by  the  carriers  at  New  York  increase  this  cost  to  an  ap- 
proximate average  of  $1  per  ton  on  the  lower  classes  and  $2  per  ton  on 
the  higher  classes.  The  estimated  item  of  20  cents  per  ton  for  the  cost 
of  loading  into  cars  is  also  incurred  and  applicable  at  Boston. 

Referring  to  the  line  haul  from  Boston,  it  is  urged  that  the  grades 
over  the  Berkshires  between  Boston  and  Albany  are  substantially  less 
than  the  grades  on  the  Baltimore  &  Ohio  and  Pennsylvania  lines.  It, 
however,  appears  that  none  of  the  import  traffic  from  Boston  moves 
via  New  York,  and  that  practically  all  of  it  moves  through  the  Albany 
or  so-called  Hudson  River  gateway.  The  question  is  one  of  relation- 
ship as  between  New  York  and  Boston.  The  conditions  west  of  the 
Hudson  River  gateway  are  identical  as  to  this  traffic  from  both  [240] 
ports.  The  distance  from  New  York  to  Albany  is  about  142  miles. 
From  Boston  to  Albany  it  is  about  201  miles. 

The  tracks  and  facilities  in  connection  with  which  the  terminal  ex- 


CHAMBER  OF  COMMERCE  OP  N.  Y.  V.  N.  Y.  C.  &  11.  R.  R.  CO.  423 

penses  in  New  York  are  incurred  are  not  devoted  particularly  to  this 
traffic.  The  rates  to  and  from  New  York  apply  to  and  from  many 
terminals  or  loading  and  unloading  points,  one  of  which  necessarily 
involves  more  terminal  work  and  expense  than  another.  It  is  admitted 
that  it  Mould  not  be  desirable  to  have  the  rates  to  and  from  a  com- 
mercial center  like  New  York  or  Boston  made  different  for  every 
terminal  or  unloading  point  where  the  service  may  be  different  from 
that  at  some  other  loading  or  unloading  point. 

It  is  suggested  that  during  the  season  of  closed  navigation  ocean- 
and-rail  rates  are  available  from  New  York  lower  than  those  from 
Boston.  During  the  season  of  open  navigation  the  rates  are  the  same. 
It  is  to  be  noted,  as  pointed  out  in  our  supplemental  report,  supra, 
that  Boston  has  certain  differential  rail  routes.  These  questions  are 
worthy  of  mention,  although  they  do  not  go  directly  to  the  question 
here  considered,  which  is  the  rates  via  the  so-called  standard  lines. 

It  is  said  that  it  is  impossible  for  Boston  to  secure  an  adequate  share 
of  the  imports  to  differential  territory  via  the  ocean-and-rail  routes 
for  the  reason  that  the  soliciting  organizations  for  Boston  have  worked 
for  many  years  solely  for  the  all-rail  routes,  and  it  would  be  difficult 
for  them  to  compete  in  Europe  for  western  import  business,  and  then 
have  to  give  it  to  steamship  lines  via  which  the  Boston  railroads  do  not 
operate  to  be  hauled  over  lines  against  which  they  have  been  competing 
for  it. 

The  Boston  interests  urge  that  if  the  standard  rail  lines  may  not 
charge  lower  rates  on  import  shipments  from  Boston  than  are  charged 
from  New  York  it  will  be  a  serious  blow  to  the  import  traffic  through 
the  port  of  Boston.  The  principal  point  relied  upon  in  support  of 
this  contention  is  the  fact  that  the  Boston  &  Albany  and  Boston  & 
Maine  railroads  have  a  long-standing  arrangement  under  Avhicli  the 
American  Express  Company  solicits  this  business  in  Europe  for  rout- 
ing via  Boston.  In  this  work  the  American  Express  Company  com- 
petes with  the  soliciting  organization  of  the  Canadian  roads,  and  it 
is  urged  that  if  the  inland  rates  from  Boston  must  lie  not  lower  than 
from  New  York  it  will  be  necessary  for  the  Boston  lines  to  perfect 
some  new  soliciting  arrangement.  We  have  no  desire  to  unnecessarily 
disturb  any  established  and  lawful  organizations  or  arrangements,  but 
in  considering,  as  a  question  of  law,  whether  or  not  lower  rates  from 
Boston  are  unjustly  discriminatory  against  New  York  we  can  not  per- 
mit the  fact  that  removal  of  the  discrimination  would  interrupt  some 
such  arrangement  to  be  conclusive.  We  have  made  no  inquiry  as  to 
the  propriety  or  lawfulness  of  the  arrangement  in  ques-  [241]  tion. 
As  has  been  stated,  the  import  shipments  from  Boston  via  the  lines  of 
the  Boston  &  Albany  and  the  Boston  &  Maine  roads  move  through  the 


424  ATLANTIC    PORT    DIFFERENTIALS 

Hudson  River  gateway  where  connection  is  made  with  the  New  York 
Central  and  other  of  its  controlled  lines,  and  from  there  it  moves  via 
lines  which  serve  or  participate  in  the  same  traffic  from  New  York. 
We  do  not  think  that  the  fact,  if  it  be  a  fact,  that  the  American  Ex- 
press Company  will  cease  soliciting  this  business  in  Europe  for  the 
Boston  lines  if  the  rail  rates  from  Boston  are  as  high  as  from  New 
York  is  justification  for  lower  rates  from  Boston  than  from  New  York 
when  the  conditions  of  transportation  from  Boston  and  from  New  York 
are  so  substantially  similar. 

Attention  is  called  to  statement  in  our  original  report  that  it  is  the 
established  policy  of  the  railroads  serving  Norfolk  and  Newport  News 
to  maintain  there  the  same  rates  that  are  contemporaneously  main- 
tained at  Baltimore,  and  it  is  stated  that  this  is  not  true  as  to  rates  on 
import  traffic.  The  statement  in  our  report  was  illustrative  of  the  gen- 
eral competitive  situation  in  the  middle  west,  was  general  in  its  char- 
acter, and,  as  a  general  statement,  is  correct. 

Petitioners  say  that  in  our  previous  reports  we  did  not  undertake  to 
fix  any  relation  of  rates  as  between  Boston,  Philadelphia,  and  Balti- 
more, but  confined  ourselves  to  fixing  the  relation  of  import  rates  as 
between  Boston  and  New  York. 

In  In  the  Matter  of  Import  Kates,  24  I.  C.  C.  78  and  678  {ante,  p. 
403,  415),  which  was  heard,  argued,  and  decided  in  connection  with  the 
instant  case,  we  said,  at  page  80  {ante,  p.  407). 

We  are  therefore  of  the  opinion  that  differentials  under  New  York  on  this  traffic 
[import],  all-rail  or  lake-and-rail,  from  PhiladeliDhia  and  Baltimore  should  be  the 
same  as  and  in  no  event  g^reater  than  those  which  existed  in  the  latter  part  of  1908, 
to  wit,  in  cents  per  100  pounds:  *  *  *  and  that  the  import  rates  from  Boston 
should  be  the  same  as  from  New  York. 

In  our  original  report  in  this  case  we  found  : 

That  differentials  under  New  York  on  import  traffic,  all-rail  and  lake-and-rail, 
from  Philadelphia  and  Baltimore  to  differential  territory  should  be  no  greater  than 
those  which  existed  in  the  latter  part  of  1908,  to  wit,  in  cents  per  100  pounds 
*  *  *.  And  that  the  import  rates  from  Boston  should  not  be  lower  than  from 
New  York. 

Petitioners  urge  that  there  can  be  no  unjust  discrimination  as  be- 
tween two  ports  unless  the  carrier  in  question  serves  both  ports,  and 
that  as  the  Boston  &  Maine  and  Boston  &  Albany  roads  do  not  serve 
New  York  lower  rates  from  Boston  than  from  New  York  do  not  un- 
justly discriminate  against  New  York.  We  have  repeatedly  held  that 
a  carrier  which  participates  in  the  transportation  to  or  from  competing 
points  is  responsible  and  answerable  for  unjust  discrimination  even 
though  its  own  lines  do  not  reach  both  points.  [242]  Neither  the  Bos- 
ton k  Albany  nor  the  Boston  &  Maine  can  carry  this  traffic  beyond 
the  Hudson  River  gateway,  and,  as  has  been  seen,  from  that  point  to 


CHAMBER  OP  COMMERCE  OF  N.  Y.  V.  N.  Y.  C.  &  H.  R.  R.  CO.  425 

the  west  it  moves  under  identical  circumstances  and  conditions  and  via 
the  same  lines  as  like  traffic  from  New  York.  The  lines  that  handle 
this  traffic  west  of  the  Hudson  River  gateway  can  not  be  permitted  to 
unjustly  discriminate  in  favor  of  Boston  and  against  New  York. 

In  the  original  hearing  a  witness  for  Boston  testified  that  officials 
of  the  New  York  Central  lines  had  stated  to  representatives  of  the 
Boston  interests  that  the  expense  of  this  service  from  New  York  was 
greater  than  from  Boston.  Counsel  now  argues  that  it  was  "conclu- 
sively proven"  that  the  cost  of  the  haul  is  less  from  Boston  than  from 
New  York  when  proper  allowance  is  made  for  terminal  costs  at  both 
ports.  Estimates  of  the  terminal  costs  made  by  a  witness  were  pre- 
sented and,  after  deducting  those  estimated  costs,  computations  of  the 
return  per  ton-mile  to  the  railroads  were  reached.  Counsel  for  the 
New  York  interests  insists  that  these  estimates  are  not  proof  as  to  costs. 
But  assuming  that  they  are  correct,  there  is  not  in  our  judgment  suffi- 
cient difference  to  warrant  lower  rates  from  Boston  than  from  New 
York.  Many  minor  costs  and  minor  extra  services  are  and  should  be 
ignored  in  an  effort  to  do  substantial  justice  to  competing  points,  and 
they  are  necessarily  ignored  by  carriers  in  competing  with  each  other. 
The  domestic  class  rates  from  Boston  to  the  West  are  the  same  as  from 
New  York.  Aside  from  differences  in  terminal  costs,  if  any,  the  serv- 
ice rendered  by  the  railroads  on  domestic  shipments  is  the  same  as  that 
rendered  on  import  shipments.  If  the  terminal  services  at  each  port 
are  to  be  accurately  estimated  and  the  returns  per  ton-mile  yielded 
after  deduction  of  such  expenses  are  to  be  conclusive  as  to  import  rates, 
it  is  difficult  to  see  how  we  can  avoid  applying  the  same  principle  to 
domestic  rates. 

The  Boston  interests  strongly  and  very  naturally  urge  the  long  con- 
tinuance of  lower  rates  on  import  traffic  from  Boston  than  from  New 
York,  resulting  from  agreements  which  have  been  made  by  the  rail- 
roads from  time  to  time,  and  which,  we  understand,  had  for  their  pur- 
pose effecting  a  certain  distribution  of  the  traffic  between  the  several 
ports  in  order  to  avoid  rate  wars.  In  our  original  report,  supra,  we 
said,  on  this  point : 

We  neither  recognize  nor  consider  the  differential  agreement  as  lawful.  The 
law  contemplates  free  competition  and  condemns  any  combination  which  restrains 
such  competition. 

In  our  supplemental  report,  supra,  we  tnentioned  differential  rail 
rates  from  Boston,  via  the  Boston  &  IVIaine  and  Boston  &  Albany  roads, 
in  connection  with  the  Canadian  Pacific  and  National  Despatch  [243] 
lines.  It  is  now  stated,  and  apparently  accurately,  tliat  the  Boston  & 
Albany  has  no  such  connections. 


426  ATLANTIC    PORT   DIFFERENTIALS 

The  Boston  &  Albany  is  a  part  of  the  New  York  Central  system 
which  reaches,  via  its  own  rails,  a  great  many  of  the  important  points 
in  differential  territory.  The  Boston  &  Albany  has  a  differential  route 
over  the  Rutland  Railroad,  which  has  certain  general  officers  in  com- 
mon with  the  New  York  Central,  but  it  is  argued  that  this  route  is  8 
per  cent,  longer  than  the  longest  of  the  differential  routes  and  12i/^ 
per  cent.  longer  than  the  shortest ;  that  its  route  is  therefore  so  cir- 
cuitous, its  territory  in  the  West  so  restricted,  and  the  physical  condi- 
tion of  part  of  it  such  that  it  can  not  successfully  move  this  traffic. 

Much  is  said  as  to  certain  rights  which  Boston  reserved  for  itself 
in  some  of  the  differential  agreements  between  the  carriers,  and  as  to 
the  responsibility  for  the  rate  war  which  led  to  the  presentation  to 
the  Commission  of  the  subject  treated  in  In  the  Matter  of  Import 
Bates,  supra,  v/hich  in  turn,  presumably,  caused  the  complaint  herein. 
It  is  unprofitable  to  further  discuss  the  question  of  how  or  why  those 
differences  were  precipitated.  The  fact  is  that  a  rate  war  was  in 
progress  which  the  representatives  of  the  carriers  serving  Boston,  New 
York,  Philadelphia,  and  Baltimore,  and  the  representatives  of  the 
commercial  interests  of  Boston,  Philadelphia,  and  Baltimore,  were 
anxious  to  terminate,  and  the  offices  of  the  Commission  were  sought  on 
the  representation  that  no  other  means  of  terminating  the  confiict  and 
determining  the  issues  involved  therein  were  possible.  While  stress 
is  laid  upon  the  fact  that  for  many  years  import  rates  from  Boston 
were,  by  agreement  between  the  carriers,  less  than  from  New  York, 
and  many  figures  have  been  submitted  showing  the  movement  of  traffic 
under  such  agreements  at  various  times,  it  is  admitted  that  the  figures 
as  to  periods  prior  to  1906  can  not  be  accepted  as  reflecting  the  effect 
of  the  rate  adjustments,  for  the  reason  that  published  rates  were  not 
adhered  to. 

The  commercial  interests  of  New  York,  Philadelphia,  and  Baltimore 
and  the  railroads  serving  Philadelphia  and  Baltimore  strongly  protest 
against  Boston  being  accorded  lower  rates  than  New  York,  and  point 
out  that  if  that  were  done  there  is  every  probability  that  roads  serving 
Philadelphia  and  Baltimore  and  not  serving  Boston  would  correspond- 
ingly reduce  the  rates  from  Philadelphia  and  Baltimore,  thereby  re- 
storing the  present  parity.  If  that  should  occur  it  would  simply  be 
a  repetition  of  what  did  occur  shortly  prior  to  the  origin  of  this  com- 
plaint. 

It  is  asserted  that  there  are  no  differential  rates  via  any  standard 
all-rail  line  from  New  York,  Philadelphia,  or  Baltimore,  and  no  dif- 
ferentia] all-rail  rates  from  either  New  York,  Philadelphia,  or  Balti- 
more. 


CHAMBER  OF  COMMERCE  OF  N.  Y.  V.  N.  Y.  C.  &  H.  R.  R,  CO.  427 

[244]  As  stated,  it  is  strongly  urged  that  unless  the  import  rates 
from  Boston  are  lower  than  from  New  York,  it  will  be  harmful  to  exist- 
ing conditions  and  make  it  difficult  for  Boston  to  retain  the  import 
business  which  it  now  has.  However  much  sympathy  we  may  have 
with  that  argument  we  can  not  make  it  the  basis  of  a  finding  as  to  un- 
just discrimination  such  as  is  prohibited  by  the  act.  AVe  have  given 
exhaustive  consideration  to  all  of  the  matters  that  have  been  presented 
and  are  of  the  opinion  that  the  conclusions  announced  in  our  original 
and  supplemental  reports,  supra,  are  correct. 


IN  THE  MATTER  OF  IMPORT  RATES. 

27  I.  C.  C.  245. 


429 


IN  THE  MATTER  OF  IMPORT  RATES. 

Decided  June  5, 1913. 
(27  I.  C.  C.  245.) 

Prior  decision  herein  adhered  to  upon  the  findings  in  Chamber  of  Commerce  case, 

ante,  page  419. 

Appearances  same  as  in  the  Chamber  of  Commerce  case  (p.  421). 

SUPPLEMENTAL  REPORT  OP  THE  COMMISSION  ON  REHEARING. 

Clark,  Chairman: 

Our  original  and  supplemental  reports  in  this  proceeding  are  at  24 
I.  C.  C.  78  and  678.  On  petition  from  the  commercial  interests  of 
Boston  and  the  Boston  &  Maine  and  Boston  &  Albany  railroads,  re- 
hearing was  granted  in  this  proceeding  and  in  Chatriber  of  Commerce 
of  New  York  v.  N.  Y.  C.  &  H.  R.  R.  R.  Co.,  original  and  supplemental 
reports  at  24  I.  C.  C.  55  and  674  (ante,  p.  377,  408),  on  the  single  ques- 
tion of  the  relationship  of  rates  on  import  traffic  from  Boston  to  dif- 
ferential territory  versus  like  rates  from  New  York.  We  have  dis- 
cussed the  matters  presented  on  rehearing  in  supplemental  report  on 
rehearing  in  the  Neiv  York  case,  ante  page  419,  and  it  is  not  necessary 
to  repeat  that  discussion.  The  conclusions  there  reached  are  controll- 
ing here. 

We  consented  to  decide  or  advise  as  to  the  adjustment  of  the  inland 
import  rates  from  the  several  ports  in  the  capacity  of  arbitrators,  upon 
urgent  representation  that  no  other  means  were  open  to  terminate  an 
existing  rate  war  and  settle  the  contentions  as  between  the  different 
ports.  It  seemed  at  the  time  the  proper  thing  for  us  to  do,  but  mani- 
festly we  can  not  make  a  decision  as  arbitrators  which  is  contrary  to 
the  adjustment  which  we  of  necessity  make  in  discharging  our  duties 
under  the  law. 

After  full  consideration  of  all  the  matters  presented  on  the  rehear- 
ing, we  are  of  the  opinion  that  the  conclusions  reached  in  our  original 
and  supplemental  reports,  supra,  are  correct,  and  are  not  prepared  to 
change  those  findings. 


431 


• 


APPENDIX. 


28  '  433 


APPENDIX 


Part  of  First  Annual  Report  on  the  Internal  Commerce  of  the 
United  States,  by  Joseph  Nimmo,  Jr.,  Chief  of  Division  of 
Internal  Commerce,  being  Part  Second  of  the 
Annual  Report  of  the  Chief  of  the  Bureau 
OF  Statistics  on  the  Commerce  and  Navi- 
gation OF  the  United  States  for  the 
Year  ending  June  30,  1876. 

THE  COMPETITIVE  FORCES  WHICH  EXERT  A  CONTROLLING  INFLU- 
ENCE OVER  THE  COMMERCE  BETWEEN  THE  WEST  AND  THE 
SEABOARD  WITH  RESPECT  TO  THE  COMMERCIAL  INTERESTS 
OF  BOSTON,  NEW  YORK,  PHILADELPHIA,  AND  BALTIMORE. 

The  conditions  under  which  competition  exerts  a  restraining  influ- 
ence over  freight-charges  may  be  more  clearly  understood  by  consider- 
ing the  forces  which  exert  a  controlliag  influence  over  commerce  be- 
tween the  West  and  the  seaboard. 

Soon  after  the  year  1850  the  railroads  extending  toward  the  West 
from  the  several  Atlantic  seaports  began  to  compete  with  the  Erie 
Canal  for  the  immense  and  rapidly-increasing  commerce  of  the  West. 
At  first  the  through  traffic  of  the  roads  was  confined  to  the  carriage  of 
provisions,  live  animals,  and  general  merchandise,  but  by  the  year  1873 
the  railroads  had  become  in  the  fullest  sense  highways  of  commerce 
for  nearly  all  classes  of  commodities,  even  in  direct  competition  with 
the  lakes  and  the  Erie  Canal.  Coal,  iron-ore,  and  other  minerals, 
chiefly  the  products  of  the  mines  of  Pennsylvania,  are  transported  to 
the  West  almost  exclusively^  by  lake,  as  return  cargoes  for  vessels  en- 
gaged in  the  transportation  of  grain  eastward.  These  heavy  mineral 
products  are  generally  transported  on  water-lines  wherever  such  fa- 
cilities exist. 

The  transportation  of  grain  is  now  the  most  important  branch  of  the 
through  traffic  from  the  West  to  the  East,  grain  and  flour  constituting 
about  50  per  cent,  of  the  entire  eastward  movement  of  through  freights. 

The  relative  importance  of  the  railroads,  and  of  the  Erie  Canal  as 
highways  of  commerce  for  the  transportation  of  grain  may  be  inferred 
from  the  following  statement  showing  the  receipts  of  grain  at  Portland. 
Boston,  New  York,  Philadelphia,  and  Baltimore  during  the  year  ending 
December  31,  1876 : 

435 


436  ATLANTIC   PORT   DIFFERENTIALS 

Bushels. 
E^ceived  at  New  York  by  canal 32,853,839 

Eeceived  at  New  York  by  rail 59,047,953 

Eeceived  at  Portland  by  rail  3,999,181 

Eeceived  at  Boston  by  rail  22,753,698 

Eeceived  at  Philadelphia  by  rail 35,546,845 

Eeceived  at  Baltimore  by  rail 37,564,536 

Total  by  rail 158,912,213 

N.  B. — There  appears  to  have  been  about  four  million  bushels  of  grain  received 
in  New  York,  coastwise,  which  does  not  appear  in  the  above  table. 

It  appears  that  only  17  per  cent,  of  the  grain  shipped  from  the  West 
reached  the  seaboard  by  the  Erie  Canal  and  that  83  per  cent,  by  the 
competing  railroads,  or  about  five  times  as  much  by  rail  as  by  canal. 

It  is  proposed  to  consider  briefly  and  in  a  somewhat  general  manner 
the  more  important  features  of  this  diversion  of  commerce  from  the 
Erie  Canal,  or  more  properly  speaking  the  development  of  commerce 
on  railroads,  and  the  questions  which  have  arisen  with  respect  to  the 
interests  of  the  rival  trunk  roads  and  the  rival  seaboard  cities.  In  this 
connection  attention  is  called  to  the  various  lines  of  transport  connect- 
ing the  West  with  the  seaboard,  as  delineated  on  maps  1  to  7,  inclusive, 
at  the  end  of  this  report.  These  lines  are  the  Lake  and  Canadian  Canal 
route  to  Montreal,  the  LaJie  and  Erie  Canal  line  to  New  York  City,  the 
Grand  Trunk  Railway,  the  New  York  Central  Railroad,  the  Erie  Rail- 
way, the  Pennsylvania  Railroad,  and  the  Baltimore  and  Ohio  Railroad. 

In  considering  the  competition  between  the  east  and  west  trunk  lines 
it  is  necessary  to  observe,  first,  the  distinction  between  local  or  non- 
competitive traffic  and  through  or  competitive  traffic.  The  expression 
' '  through  traffic ' '  is  here  applied  to  traffic  between  the  Western  States 
and  the  Atlantic  seaboard.  Statistics  showing  the  relative  proportion 
of  local  and  through  traffic  can  only  be  obtained  in  regard  to  the  Erie 
Canal  and  the  Pennsylvania  Railroad.  The  New  York  Central  and 
the  Erie  Railroads  present  only  statistics  in  regard  to  their  total  ton- 
nage movement,  and  the  Baltimore  and  Ohio  Railroad  Company  merely 
presents  facts  as  to  through  tonnage  and  the  quantities  of  grain  and 
flour  and  of  coal  and  live  stock  transported. 

The  local  traffic  on  almost  all  railroads  greatly  exceeds  in  importance 
the,  "through  traffic"  which  we  are  here  especially  considering.  Dur- 
ing the  year  1875  the  through  tonnage  of  the  Pennsylvania  Railroad 
amounted  to  1,354,203  tons  and  the  local  tonnage  amounted  to  7,761,165 
tons,  the  through  tonnage  being  only  15  per  cent,  of  the  total  tonnage. 

The  number  of  through  and  local  tons  carried  one  mile  were — 

Through  tons  carried  one  mile 484,043,840 

Local  tons  carried  one  mile  995,370,626. 

Total   1,479,414,466 


.     APPENDIX.  437 

It  appears  from  this  that  the  ton-mileage  of  through  freight  was  33 
per  cent,  of  the  total  ton-mileage.  The  through  tonnage  of  the  Erie 
Canal  during  the  year  1875  appears  to  have  been  about  50  per  cent,  of 
the  total  tonnage  carried.  From  the  very  scanty  data  of  this  sort 
which  can  be  procured  as  to  local  and  through  freight  tonnage  it  is 
estimated  that  the  through  traffic  passing  over  all  the  main  lines  con- 
necting the  West  with  the  East  is  about  33  per  cent,  of  the  total  traffic 
over  the  several  lines.  The  proportion  of  "local"  and  "through" 
traffic  differs  very  much  on  the  various  lines. 

Attention  is  especially  called  to  the  fact  that  the  local  traffic  is  hut 
little  affected  hy  the  competition  between  rival  trunk  lines  or  hy  the 
competition  hetween  rival  seaboard  cities,  whereas  the  through  traffic 
is  greatly  exposed  to  such  competition. 

VARIOUS  DEGREES  OF  COMPETITION  IN  THE  COMMERCE  BETWEEN  THE  WEST 

AND  THE  SEABOARD. 

The  through  traffic  between  the  West  and  the  seaboard  is  competi- 
tive in  various  degrees,  both  with  respect  to  the  interests  of  the  rival 
trunk  lines  and  to  the  interests  of  the  rival  commercial  cities  on  the 
Atlantic  seaboard.  There  are  many  points  to  and  from  which  the  fa- 
cilities of  transport  afforded  by  one  route  for  certain  freights  are  so 
much  superior  to  the  facilities  afforded  by  every  other  practicable  route 
that  in  practice  the  more  favorably  situated  line  enjoys  a  monopoly  of 
the  traffic ;  and  there  are  also  many  points  to  and  from  which  there  are 
several  lines  of  transport,  all  affording  such  facilities  for  certain  traffic, 
as  to  engage  with  each  other  in  a  constant  and  effective  competition. 

The  field  of  competition  in  the  great  struggle  for  the  traffic  between 
the  western  states  and  the  seaboard  begins  in  the  State  of  Ohio  and 
grows  stronger  and  more  complicated  as  we  advance  toward  the  West. 
At  Cincinnati,  Louisville,  Indianapolis,  Saint  Louis,  Chicago,  Peoria, 
and  all  other  important  centers  of  trade,  the  shipper  has  not  only  the 
option  of  transport  to  each  one  of  the  Atlantic  seaports,  but  he  has 
also  the  choice  of  two  or  more  routes  to  the  same  port,  all  offering  equal 
rates  in  time  of  agreement,  but  during  the  frequently  recurring  and 
long  enduring  railroad  wars  the  agents  of  each  line  bidding  against  all 
the  others  and  struggling  for  all  traffic  which  is  in  any  practical  sense 
competitive.  The  various  degrees  of  competition  range  from  the  re- 
mote and  incidental  competition,  the  existence  of  which  may  sometimes 
be  regarded  as  problematical,  to  that  direct  struggle  between  rivals  for 
the  same  traffic.  This  may  be  illustrated  with  respect  to  traffic  over 
the  east  and  west  trunk  lines  as  follows : 

First,  The  direct  shipment  of  merchandise  from  interior  points  at 


, 


438  ATLANTIC    PORT   DIFFERENTIALS 

the  West  to  Europe  and  the  direct  shipment  of  merchandise  from  Eu- 
rope to  interior  points  at  the  West  constitute  traffic  which  is  in  the 
highest  sense  competitive,  since  the  rail-lines  from  such  interior  points 
connect  directly  with  ocean-steamer  lines  to  Europe  at  Boston,  New 
York,  Philadelphia,  and  Baltimore.  During  the  last  two  or  three  years 
very  little  difference  has  existed  between  the  prevailing  rates  from 
interior  points  in  this  country  to  points  in  Europe. 

Second.  The  shipment  of  commodities  from  points  in  the  AYest  to  At- 
lantic sea-ports  for  local  consumption,  for  distribution  coastwise  or  to 
interior  points  in  the  United  States,  or  for  exportation  to  foreign  coun- 
tries, constitutes  a  traffic  which  is  competitive,  but  not  to  as  great  an 
extent  as  direct  shipments  from  interior  points  at  the  AA^est  to  points  in 
Europe.  In  the  case  of  shipments  to  the  seaport  markets,  other  con- 
siderations are  involved  besides  the  mere  question  of  transportation. 
These  considerations  are  the  advantages  afforded  by  the  several  mar- 
kets, the  relative  magnitude  of  the  home  and  foreign  demand,  and  the 
facilities  for  storage  and  for  interior,  coastwise,  or  foreign  shipments 
at  each  port. 

Third.  But  there  is  a  third  and  the  largest  class  of  traffic  which  is 
even  less  affected  by  the  competition  of  rival  lines  and  of  rival  sea- 
ports, viz,  direct  shipments  from  the  AVest  for  consumption  at  interior 
points  in  the  Atlantic  States.  Such  shipments  are  in  many  cases  con- 
tiued  to  one  of  the  trunk  lines  and  therefore  form  a  part  of  its  local 
traffic.  In  other  cases  two  or  even  three  of  the  lines  may  compete  for 
the  traffic,  but  it  is  excluded  from  the  direct  competition  of  all  the 
trunk  lines  by  certain  geographical  limitations. 

But  even  where  the  traffic  appears  to  be  confined  to  one  or  two  lines, 
the  rates  of  transportation  are  to  some  extent  controlled  through  the 
competition  of  product  with  product  in  the  various  markets  of  the 
country,  and  thus  each  one  of  the  transportation-lines  exerts  a  competi- 
tive influence  over  the  rates  on  other  roads. 

It  is  important  to  notice  in  this  connection  the  fact  that  the  home 
consumption  in  the  Atlantic  States  very  largely  exceeds  the  foreign  de- 
mand. Of  the  entire  surplus  products  of  the  West,  embracing  vege- 
table food,  animals  and  their  products,  spirituous  and  malt  liquors,  and 
the  innumerable  commodities  transported  in  greater  or  less  quantities, 
very  much  the  l&rger  part  is  shipped  to  seaports  or  to  interior  points 
on  the  several  trunk  lines  for  local  consumption.  It  was  found  by 
careful  computation  that  in  the  year  1872  about  40  per  cent,  of  all  the 
grain  shipped  into  the  Atlantic  States  was  exported  and  about  60  per 
cent.  Avas  consumed  in  the  United  States.     During  the  year  1876  also, 


4PPENDIX,  439 

the  demand  for  such  products  in  the  states  of  the  Atlantic  seaboard 
largely  exceeded  the  foreign  demand. 

In  view  of  the  facts  thus  presented  it  is  evidently  necessary  in  con- 
sidering the  subject  of  transportation  between  the  West  and  the  sea- 
board to  distinguish  carefully  between  these  three  degrees  of  competi- 
tion with  respect  to  through  traffic,  viz : 

First.  Direct  shipments  from  interior  points  at  the  West  to  Europe. 

Second.  Shipments  from  the  West  to  Atlantic  sea-ports;  and 

Third.  Direct  shipments  from  the  West  to  interior  points  in  the 
states  on  the  Atlantic  seaboard. 

The  importance  of  these  distinctions  has  recently  been  realized  in  the 
course  of  the  difficulties  which  have  been  encountered  by  the  managers 
of  the  trunk  lines  connecting  the  AVest  and  the  seaboard  in  their  at- 
tempts to  adjust  through  rates  between  the  centers  of  trade  at  the 
West  and  Boston,  New  York,  Philadelphia,  and  Baltimore.  About  the 
1st  of  February,  1877,  the  representatives  of  the  various  trunk  lines 
met  at  New  York  to  form  a  basis  of  agreement.  There  was  no  difficulty 
in  agreeing  as  to  the  rates  by  the  various  lines  for  all  traffic  consigned 
from  the  West  directly  to  ports  in  Europe,  but  in  regard  to  rates  on 
commodities  shipped  to  the  seaports  above  mentioned  the  trunk  lines 
were  unable  to  agree,  since  such  commodities  may  be  consumed  at  those 
ports,  and  therefore  constitute  a  local  traffic,  or  be  exported  to  foreign 
countries  or  to  seaports  in  the  United  States,  and  thus  become  competi- 
tive traffic.  The  final  adjustment  of  differences  in  this  case  is  believed 
to  have  been  effected  through  the  spirit  of  compromise.  The  real  diffi- 
culty in  the  case  was  to  distinguish  between  "local"  and  "competi- 
tive ' '  traffic. 

This  subject  involves  many  perplexing  questions  in  practice,  for  ex- 
ample, the  drawing  of  a  line  of  distinction  between  competitive  and 
non-competitive  business ;  the  determination  of  the  geographical  extent 
of  the  influence  of  trunk  lines  by  means  of  their  various  branches  and 
connections ;  questions  as  to  the  relative  advantages  which  the  rival 
lines  enjoy  on  account  of  distance,  grades,  and  other  elements  of  the 
cost  of  transportation ;  the  facilities  for  coastwise  and  foreign  distri- 
bution, &c. 

Experience  seems  to  prove  that  there  must  be  either  a  tacit  or  a 
formal  agreement  as  to  rates  on  all  competitive  traffic,  the  rates  by  tacit 
agreement  constituting  substantially  the  market  value  of  transporta- 
tion, whereas  the  formal  agreement  is  an  arbitrary  or  artificial  mode 
of  adjustment. 


440  ATLANTIC    PORT   DIFFERENTIALS 

CERTAIN  IMPORTANT  CONDITIONS  UNDER  WHICH  THE  TRUNK  LINES  ENGAGE 
IN  TRAFFIC  BETWEEN  THE  WEST  AND  THE  SEABOARD. 

The  several  trunk  lines  engage  in  traffic  between  the  West  and  the 
Atlantic  seaboard  under  certain  very  important  conditions  which  may 
be  stated  as  follows:  The  more  northerty  lines  to  the  seaboard  enjoy 
peculiar  advantages  on  account  of  their  geographical  position.  Grain 
raised  in  the  States  of  Iowa,  Minnesota,  and  Wisconsin,  which  has  the 
option  of  transport  to  the  seaboard  by  the  lakes  and  the  New  York  or 
Canadian  canals,  as  well  as  by  the  more  northerly  roads,  can,  under 
ordinary  circumstances,  be  shipped  to  Europe  via  Montreal,  Boston,  or 
New  York  at  less  cost  than  by  the  way  of  Philadelphia  or  Baltimore. 
On  the  other  hand,  grain  raised  in  the  southern  part  of  Illinois  or  In- 
diana and  exported  to  Europe  can,  on  account  of  shorter  rail  distance 
and  direct  connecting  ocean-lines,  be  transported  over  the  Pennsjd- 
vania  Eailroad  and  over  the  Baltimore  and  Ohio  Railroad,  via  Balti- 
more and  Philadelphia,  cheaper  than  by  the  way  of  the  more  northerly 
roads.  These  conditions  are,  however,  quite  variable  in  practice.  In 
case  the  Baltimore  and  the  Philadelphia  markets  are  glutted  or  no 
available  tonnage  can  be  secured  at  these  ports  for  foreign  shipment, 
commodities  raised  on  the  line  of  the  Baltimore  and  Ohio  or  the  Penn- 
s.ylvania  Railroad  will  inevitably  take  a  longer  and  more  expensive 
route  if  such  movement  should  be  justified  by  more  favorable  condi- 
tions of  trade  or  of  transport  at  other  seaports. 

This  is  but  a  general  view  of  the  question.  It  runs  into  almost  end- 
less detail  and  presents  many  striking  exceptions.  There  are  through- 
out the  western  states  many  small  interior  points  situated  upon  a  road 
forming  a  direct  communication  with  one  of  the  trunk  lines  to  the  sea- 
board only.  Assume  a  point  thus  situated  on  one  of  the  connecting 
lines  of  the  New  York  Central  Railroad,  from  which  direct  transporta- 
tion can  be  secured  without  change  of  cars  to  the  city  of  New  York,  but 
involving  a  change  of  cars  if  sent  to  the  seaboard  over  any  other  trunk 
line.  The  mere  question  of  direct  shipment  or  of  avoiding  the  cost  of 
transfer  to  any  other  line  may  cause  the  commodity  to  go  to  New  York 
regardless  of  distance,  or  perhaps  of  greater  advantages  offered  at  cer- 
tain times  by  rival  lines  or  rival  markets.  Conditions  of  a  similar  na- 
ture also  operate  in  favor  of  the  other  seaports. 

A  second  condition  under  which  the  trunk  lines  between  the  West 
and  the  seaboard  engage  in  ''through  traffic"  is  that  the  amount  of 
grain  and  other  western  products  transported  to  each  Atlantic  sea- 
port for  exportation  to  foreign  countries  depends  largely  upon  the 
available  supply  of  tonnage  for  such  shipments  at  the  several  ports. 
It  is  found  that  the  grain-trade  of  a  port  cannot  be  increased  very 


APPENDIX.  441 

much  out  of  proportion  to  its  total  commerce ;  or,  in  other  words,  that 
the  grain-trade  is  essentially  a  part  of  a  great  whole,  and  not  an  in- 
dependent branch  of  commerce.  Grain  which,  on  account  of  the  geo- 
graphical situation  of  the  point  of  production,  would,  all  tilings  else 
being  equal,  go  to  Philadelphia,  may,  on  account  of  the  scarcity  of  ton- 
nage at  that  port,  be  diverted  to  New  York.  The  latter  city,  by  virtue 
of  its  enormous  shipping  interests,  thus  determines  the  direction  of  a 
very  large  amount  of  the  general  trade  between  the  West  and  foreign 
countries. 

The  trunk  lines  terminating  at  Montreal,  at  Boston,  at  Philadelphia, 
and  at  Baltimore  have  been  able  to  secure  the  control  of  a  part  of  the 
foreign  trade  by  means  of  improved  facilities  for  the  transfer  of 
freights  from  cars  to  seagoing  vessels,  and  through  the  new  and  im- 
proved mode  of  shipping  commodities  on  direct  consignment  from 
points  at  the  West  to  Europe. 

For  the  purpose  of  effecting  this  object  certain  of  the  trunk  lines 
have  entered  into  combinations  or  agreements  of  some  sort  with  steam- 
er-lines making  regular  trips  between  the  respective  seaports  and  the 
principal  commercial  ports  of  Europe,  and  they  have  also  aided  di- 
rectly or  indirectly  in  the  establishment  of  such  ocean  steamer-lines. 
In  addition  to  the  steamer-lines,  however,  a  very  large  amount  of  sail- 
ing tonnage,  not  engaged  in  any  particular  traffic,  is  always  required  in 
order  to  meet  unexpected  demands  in  any  particular  direction.  Espe- 
cially is  this  true  with  respect  to  the  transportation  of  grain,  the  move- 
ments of  which  are  exceedingly  fluctuating,  not  only  from  week  to 
week,  but  also  from  year  to  year.  This  requirement  is  met  in  the 
largest  degree  at  New  York,  where  shipping  of  all  kinds,  both  sailing- 
vessels  and  steamers,  is  generally  free  from  any  sort  of  combination  of 
interest  with  the  transportation-lines  to  the  interior. 

**[In  the  Appendix  to  this  report]  may  be  found  a  statement,  pre- 
pared by  Mr.  Charles  Randolph,  which  indicates  the  relative  through 
charges  which  prevailed  during  the  year  1876  for  the  transportation  of 
wheat  from  Chicago  to  Liverpool  via  Baltimore,  Philadelphia,  New 
York,  and  Montreal,  respectively. 

The  total  through  charges  by  the  various  routes  at  the  time  Mr.  Ran- 
dolph presented  his  statement  were  as  follows : 

Cents  per  bnshol. 

Via  Baltimore    IVIq 

Via  Philadelphia   ^2' 5^ 

Via  New  York ^*-^7 

Via  Montreal    '^^ '  "^ 

The  closeness  of  the  competition  may  be  seen  from  the  fact  that  the 
difference  between  the  charges  via  the  three  Atlantic  seaports  of  the 


442  ATLANTIC    PORT   DIFFERENTIALS 

United  States  was  only  eight-tenths  of  a  cent,  and  that  the  charges  via 
]\Iontreal  were  but  one  and  a  half  cents  higher  than  those  via  New 
York. 

A  third  condition  under  which  the  trunk  lines  engage  in  traffic  be- 
tween the  West  and  the  seaboard  is  that  the  amount  of  icestern  traffic 
over  each  one  of  the  trunk  roads  is  to  a  great  extent  limited  hy  the  de- 
mands at  interior  points  on  its  line  and  at  its  terminus  or  termini  on 
the  Atlantic  seaboard. 

Flour  and  other  products  of  the  state  of  Michigan,  purchased  for  the 
purpose  of  supplying  the  local  demands  at  points  in  the  states  of  West 
Virginia,  Maryland,  or  Pennsylvania,  on  or  near  the  main  line  or 
branch  lines  of  the  Baltimore  and  Ohio  Railroad,  must  necessarily  be 
transported  to  such  points  over  that  road,  although  in  moving  to  these 
points  it  may  cross  all  the  other  great  trunk  lines.  Such  traffic  is  con- 
sidered ' '  local "  or  "  non-competitive. ' '  The  local  demands  of  the  city 
of  Baltimore  may  be  met  by  the  Baltimore  and  Ohio  or  by  the  Penn- 
sylvania Railroad,  since  both  of  these  roads  have  connecting  lines  from 
the  state  of  Michigan  to  Baltimore.  But  the  more  northerly  roads  are 
not  competitors  for  this  traffic.  Grain  raised  in  the  southern  part  of 
Illinois  and  shipped  to  interior  local  markets  in  the  states  of  Pennsyl- 
vania, New  Jersey,  New  York,  or  the  New  England  States  will  almost 
invariably  be  transported  over  the  line  forming  a  direct  connection  be- 
tween the  point  of  production  and  the  point  of  consumption,  as  traffic 
of  this  character  is  in  the  least  degree  competitive.  Grain  and  western 
products  shipped  to  New  York  and  to  Boston  for  local  consumption 
will  generally  be  transported  over  direct  lines  terminating  at  one  or 
the  other  of  these  points. 

In  the  cases  just  adduced  the  geographical  situation  of  the  point  of 
production  and  of  the  point  of  consumption  mainly  determines  the 
route,  since  it  is  confined  to  one  or  two  lines.  Other  lines  would  com- 
pete, if  at  all,  under  very  great  disadvantages  with  respect  to  time,  dis- 
tance, and  transfer  of  freight  from  one  vehicle  to  another. 

THE  COMPETITIVE  INFLUENCE  OF  THE  TRUNK  LINES  AND  OF  THE  ATLANTIC 
SEAPORTS  DIFFER  WITH  RESPECT  TO  DIFFERENT  COMMODITIES. 

The  competitive  influence  of  the  various  trunk  lines  and  of  the  sev- 
eral Atlantic  seaports  differ  very  widely,  with  respect  to  different  com- 
modities. Certain  commodities  furnish  a  large  amount  of  competitive 
traffic,  whereas  other  commodities,  perhaps  produced  in  the  same  lo- 
cality, are  in  a  very  much  less  degree  competitive.  Cotton  being  a 
commodity  of  high  value,  in  proportion  to  its  weight  and  bulk,  and  be- 
ing transported  great  distances,  is  in  the  highest  degree  competitive 


APPENDIX.  443 

with  respect  to  almost  all  the  great  trunk  lines  of  the  country  and  with 
respect  to  many  rival  markets.  Hay,  potatoes,  and  vegetables,  being 
heavy  commodities  of  low  value  and  produced  in  almost  every  state 
and  county,  are  in  the  lowest  degree  competitive.  They  constitute  a 
part  of  the  local  traffic  of  railroads  and  of  the  local  trade  of  the  sev- 
eral Atlantic  seaports,  since  each  port  has  to  a  great  extent  its  separate 
sources  of  supply. 

The  contests  which  have  been  going  on  during  the  last  four  years 
with  respect  to  the  movements  of  grain  from  the  West  to  the  seaboard 
render  it  a  matter  of  much  interest  to  note  the  characteristics  of  the 
different  cereals  with  respect  to  the  competitive  forces  of  transport  and 
of  trade.  Wheat,  wheat  Hour,  and  corn,  being  largely  exported,  are 
to  that  extent  in  a  high  degree  competitive  as  to  the  interests  of  the 
several  ports.  Oats,  barley,  and  rye,  on  the  other  hand,  are  exported 
in  very  limited  quantities,  and  are,  therefore,  both  with  respect  to  the 
interests  the  several  trunk  lines  and  of  the  several  seaboard  cities,  re- 
garded as  "local"  or  "non-competitive"  commodities.  During  the 
year  1876  there  was  received  at  the  ports  of  Portland,  Boston,  New 
York,  Philadelphia,  and  Baltimore  161,312,646  bushels  of  wheat,  wheat- 
flour,  and  corn,  and  30,811,570  bushels  of  rye,  oats,  and  barley ;  and 
there  were  exported  103,354,171  bushels  of  wheat,  wheat-flour,  and 
corn,  and  2,678,788  bushels  of  rye,  oats,  and  barley,  or,  in  other  words, 
of  the  wheat,  wheat-flour,  and  corn  received,  64  per  cent,  teas  exported, 
and  of  the  rye,  oats,  and  barley  received  only  9  per  cent,  was  exported. 
Grain  shipped  to  each  of  the  Atlantic  seaports  for  local  consumption 
naturall}'  forms  a  part  of  the  traffic  of  the  roads  which  afford  the  fa- 
cilities of  direct  shipment. 

THE  INTERESTS  OF   THE  TRUNK  LINES  AND  OP  THE   SEABOARD   CITIES  ARE 
NOT  ALWAYS  IDENTICAL. 

In  order  to  appreciate  the  conditions  which  determine  the  course  of 
trade  between  the  West  and  the  seaboard,  it  is  important  to  note  the 
fact  that  the  interests  of  the  trunk  lines  and  of  the  seaports  which  re- 
spectively constitute  their  eastern  termini  are  not  in  all  respects  identi- 
cal, although  not  necessarily  antagonistic. 

The  interests  of  the  trunk  roads  are  sometimes  apparently  at  vari- 
ance ifith  the  interests  of  their  eastern  termini. — The  interests  of  the 
New  York  Central  Railroad  with  respect  to  its  "through  traffic"  are 
closely  identified  with  the  commercial  interests  of  New  York  City,  and 
yet  the  managers  of  that  road  find  it  to  their  interest  to  develop  traffic 
between  the  West  and  the  New  England  States,  since  this  traffic  passes 
over  297  miles  of  their  road  from  Buffalo  to  Albany.     The  interests  of 


444  ATLANTIC   PORT   DIFFERENTIALS 

the  road  are  most  intimately  related  to  the  commercial  interests  of  the 
city  of  New  York ;  yet  its  managers  would  not  attempt  to  force  New 
England  freights  to  New  York,  thence  to  be  distributed  to  the  New 
England  States,  as  was  the  practice  when  the  Erie  Canal  was  the  only 
avenue  of  commerce  between  the  West  and  the  seaboard.  Any  attempt 
of  this  kind  would  simply  be  to  abandon  the  New  England  business  to 
some  existing  road  or  to  some  new  road  which  would  inevitably  be  con- 
structed in  order  to  supply  the  demands  of  the  New  England  States  for 
direct  trade.  The  New  England  traffic  of  the  New  York  Central  Rail- 
road, (which  is  said  to  constitute  about  60  per  cent,  of  its  through 
traffic,)  by  increasing  the  volume  of  its  total  traffic,  greatly  reduces  the 
cost  of  transportation  and  thus  affords  to  New  York  City  the  advan- 
tages of  cheap  transportation. 

In  like  manner  the  interests  of  the  Baltimore  and  Ohio  Railroad  are 
closely  allied  to  the  commercial  interests  of  the  city  of  Baltimore ;  yet 
the  management  of  that  road  find  it  to  their  interest  to  carry  western 
products  consigned  to  Philadelphia  to  New  York  and  to  Boston.  This 
they  are  able  to  do  by  means  of  their  eastern  connections,  viz,  the 
Philadelphia,  Wilmington  and  Baltimore  Railroad  to  Philadelphia, 
and  the  Pennsylvania  Railroad  line  from  Philadelphia  to  New  York ; 
also,  the  interior  water-line  formed  by  the  Chesapeake  Bay,  the  Chesa- 
peake and  Delaware  Canal,  the  Delaware  River,  and  the  Delaware  and 
Raritan  Canal  to  New  York,  and  the  outside  lines  by  the  ocean  to  Phila- 
delphia, New  York,  and  Boston. 

The  Baltimore  and  Ohio  Railroad  Company  has  its  soliciting-agents 
at  Philadelphia,  at  New  York,  and  at  Boston  for  the  purpose  of  secur- 
ing a  share  of  the  west-bound  freight  to  points  reached  by  its  western 
lines  and  their  connections.  In  so  far  as  possible,  the  managers  of  this 
road  undoubtedly  direct  traffic  in  the  interest  of  Baltimore,  but  their 
power  to  do  so  is  not  absolute.  In  competing  for  traffic  to  and  from 
other  Atlantic  seaports,  they  must  afford  to  that  traffic  all  necessary 
facilities. 

The  additional  traffic  secured  to  and  from  other  cities  than  Balti- 
more, by  increasing  the  business  of  the  road  tends  to  reduce  the  cost  of 
transportation  and  thus  incidentall^y  to  advance  the  commercial  inter- 
ests of  that  city. 

It  may  be  stated  generally  that  the  managers  of  all  the  trunk  lines, 
while  recognizing  the  importance  of  affording  the  greatest  possible 
facilities  to  their  respective  terminal  cities,  are  coming  to  realize  the 
fact  that  the  interests  of  the  transporter  may  best  be  subserved  by  in- 
terfering as  little  as  possible  with  the  natural  course  of  commerce.  The 
merchants  also  realize  the  fact  that  their  interests  may  best  be  sub- 


APPENDIX.  445 

served  by  conducting  their  business  without  any  special  reference  to 
the  interests  of  the  transporter.  Commerce  can  only  be  prosperous  so 
long  as  it  is  free.  It  can  never  be  bound  to  the  car-wheel  of  any  rail- 
road company.  Its  course,  its  limits,  and  all  the  forces  which  control 
its  movements  are  of  a  different  character  from  those  which  surround 
the  managers  of  transportation-lines.  The  economies,  and  the  con- 
siderations Avhich  govern  men  in  trade,  not  only  differ  from,  but  are 
oftentimes  opposed  to,  those  M'hich  shape  the  judgment  and  form  the 
policy  of  the  managers  of  railroads.  No  commercial  city  can  become 
so  wedded  to  any  one  or  more  transportation-lines  that  it  can  afford  to 
neglect  commerce  which  would  naturally  come  to  it  from  other  lines 
than  the  one  upon  which  its  prosperity  mainly  depends,  nor,  on  the 
other  hand,  can  a  railroad  company  refuse  to  allow  traffic  to  pass  over 
its  line,  or  over  a  part  of  its  line,  even  if  such  traffic  should  afterward 
be  diverted  to  another  market  than  the  one  with  which  its  interests  are 
most  closely  identified. 

In  manj'  important  features,  the  interests  of  transportation  and  of 
trade  are  correlative,  yet  there  are  certain  incompatibilities  of  interest 
which  forbid  that  they  should  be  very  closely  joined  together.  ]\Iany 
years  ago  the  city  of  Baltimore  held  a  very  much  larger  proportion  of 
the  stock  of  the  Baltimore  and  Ohio  Railroad  than  at  the  present  time, 
•and  the  city  directors,  in  connection  with  the  state  directors,  controlled 
the  policy  of  the  road.  But  the  road  did  not  prosper.  Subsequently 
a  change  took  place  in  its  management,  and  the  road  has  ever  since  been 
conducted  upon  the  strictly  business  principle  of  making  its  interests 
paramount  to  all  other  considerations  in  the  conduct  of  its  affairs. 
Traffic  of  all  kinds  has  been  secured,  without  regard  to  source  or  des- 
tination, and  the  road  has  become  in  the  largest  sense  a  commercial 
highway.  The  adoption  of  this  line  of  policy  not  only  rescued  the  road 
from  stagnation  and  apprehended  disaster,  but  it  has  been  the  means 
of  greatly  advancing  the  interests  of  Baltimore  and  of  establishing  her 
commercial  independence.  Experience  proves  that  attempts  by  com- 
mon carriers  to  control  commercial  movements  are  against  public 
policy,  and  that  such  attempts  create  popular  discontent  and  ultimately 
lead  to  disaster. 

In  practice  many  curious  and  perplexing  questions  arise  as  to  the 
relative  rates  which  shall  prevail  between  the  West  and  the  several 
rival  Atlantic  seaports.  A  single  illustration  will  suffice  upon  this 
point.  When  a  war  of  rates  is  begun  at  New  York,  it  becomes  neces- 
sary for  the  Baltimore  and  Ohio  Railroad  to  reduce  its  rates  to  and 
from  New  York  in  order  to  be  able  to  secure  a  share  of  western  traffic 
to  and  from  that  point.     If,  at  the  same  time,  upon  its  much  more  im- 


446  ATLANTIC    PORT    DIFFERENTIALS 

portant  traffic  between  the  West  and  the  city  of  Baltimore  rates  are 
maintained,  it  is  evident  that  a  discrimination  would  arise  as  against 
the  interests  of  the  cit}^  of  Baltimore  and  in  favor  of  New  York,  and 
this  discrimination  might  go  to  the  extent  of  carrying  freights  to. and 
from  New  York  through  the  city  of  Baltimore  for  less  than  the  rates 
to  Baltimore.  It  then  becomes  a  nice  ciuestion  of  expediency  with  the 
railroad  company  as  to  whether  they  should  reduce  their  rates  on  their 
main  traffic  to  the  city  of  Baltimore,  in  order  to  meet  the  rates  on  their 
comparatively  small  traffic  to  the  city  of  New  York — rates  which  have 
been  reduced  upon  compulsion,  and  as  the  result  of  a  struggle  between 
other  roads. 

A  very  important  question  also  arises  with  respect  to  the  interests  of 
the  city  of  Baltimore,  as  to  whether  its  most  important  avenue  of  com- 
merce with  the  West  should  be  allowed  to  discriminate  against  it  in 
the  interest  of  a  rival  seaport.  It  may  be  added  that,  even  if  the  Bal- 
timore and  Ohio  Railroad  were  to  pursue  the  polic}^  of  attempting  to 
conform  its  through  rates  at  all  times  to  the  rates  to  and  from  other 
seaports,  such  changes  might  create  other  discriminations,  and  it  might 
therefore  prove  to  be  expedient,  even  in  the  light  of  the  interests  of  the 
city  of  Baltimore,  for  the  Baltimore  and  Ohio  Railroad  to  maintain  its 
normal  freight-charges  rather  than  encourage  those  capricious  fluctua- 
tions which  are  detrimental  to  the  interests  of  commerce.  Questions 
of  this  character  belong  to  the  details  of  railway  management.  The 
determination  of  each  case  depends  upon  the  circumstances  surround- 
ing it,  and  upon  the  views  with  respect  to  the  relations  of  the  railroads 
to  the  public  which  may  from  time  to  time  prevail, 

TJie  interests  of  the  seaboard  cities  are  sometimes  apparently  at  vari- 
ance tvith  the  interests  of  the  trunk  lines. — There  are  circumstances  in- 
volved in  the  adjustment  of  competitive  rates  between  the  West  and 
the  seaboard  which  relate  especially  to  the  interests  of  the  markets  and 
to  the  various  industrial  enterprises  of  rival  seaports.  Traffic  which  is 
apparently  local  with  respect  to  the  trunk  lines  may  be  in  a  marked 
degree  competitive  with  respect  to  the  interests  of  these  cities.  This 
may  be  illustrated  as  follows :  A  firm  in  New  York  City  engaged  in 
the  manufacture  and  sale  of  linseed-oil  receives  large  quantities  of  lin- 
seed from  the  West.  Shipments  to  them  necessarily  come  direct  from 
the  points  of  production,  and  the  trunk  lines  to  other  cities  are  not  re- 
garded as  competitors  for  this  traffic.  In  the  current  phrase  of  man- 
agers of  railroad  traffic,  such  shipments  are  considered  to  be  "local  to 
New  York."  There  is  also  a  firm  in  Baltimore  engaged  in  the  same 
business  and  also  receiving  linseed  from  the  West,  the  rail-rates  on  this 
coinmrxlity  being  13  per  cent,  less  than  the  rates  to  New  York.     The 


APPENDIX,  447 

transportation  of  linseed  to  this  firm  by  the  Baltimore  and  Ohio  Rail- 
road is  also  considered  to  be  local  to  that  road,  since  it  is  shipped  for 
the  purpose  of  meeting  a  local  demand  at  the  city  of  Baltimore.  Never- 
theless, this  traffic  is  competitive  with  respect  to  the  interests  of  the 
two  cities.  Two-thirds  of  the  weight  of  the  product  of  linseed  when 
crushed  is  oil-cake,  a  prominent  article  of  export.  Oil-cake  is  a  com- 
modity of  low  value  in  proportion  to  its  weight,  (being  worth  only 
about  $42  per  ton,)  and  therefore  the  difference  of  13  per  cent,  in  rail- 
rates  to  Baltimore  causes  a  discrimination  in  favor  of  the  manufacturer 
at  that  city,  so  far  as  relates  to  the  exportation  of  oil-cake  to  Europe, 
for,  as  we  have  already  seen,  the  transportation  of  the  products  of  the 
West  to  Europe  is  in  the  highest  degree  "competitive  traffic,"  since 
the  facilities  of  rail  and  steamship  lines  exist  at  each  of  the  great  At- 
lantic seaports.  Linseed-oil  is  also  shipped  both  by  the  Baltimore  and 
the  New  York  I\Ianufacturers  to  all  parts  of  the  United  States,  and  it 
is  also  exported  to  foreign  countries.  The  linseed-oil  trade  is  there- 
fore in  a  high  degree  competitive  with  respects  to  the  manufacturing 
and  commercial  interests  of  the  two  cities.  Many  other  illustrations 
might  be  given  of  traffic  apparently  local  with  respect  to  the  interests 
of  the  trunk  lines,  but  competitive  with  respect  to  the  interests  of  the 
Atlantic  seaports. 

It  ma}^  be  stated,  generally,  that  the  transportation  of  all  classes  of 
raw"  material  from  the  West  to  be  manufactured  or  advanced  in  the 
process  of  manufacture  at  two  or  more  of  the  Atlantic  seaports,  while 
it  may  be  considered  to  be  local  or  non-competitive  with  respect  to  the 
roads,  is  competitive  with  respect  to  the  interests  of  the  cities. 

The  competitive  elements  of  transportation  and  of  trade  present 
themselves  under  various  phases  and  give  rise  to  a  great  variety  of 
practical  questions  in  attempts  to  adjust  traffic  between  roads  or  the 
course  of  trade  as  between  rival  cities. 

The  control  exercised  by  the  great  trunk  railroad  companies  over 
their  competitive  traffic  is  from  year  to  year  growing  weaker,  and  the 
local  or  non-competitive  traffic  is  continually  being  invaded  by  the  in- 
creasing influence  of  the  various  elements  of  competition.  There  is  a 
constant  demand  for  the  construction  of  branch  roads  cutting  across 
existing  trunk  roads,  and  forming  new  competing  lines.  These  branch 
roads  in  some  cases  eventually  form  parts  of  great  trimk  lines  between 
different  sections  of  the  country.  Results  of  a  similar  character  have 
followed  the  construction  of  branch  lines  by  the  departments  and  com- 
munes of  France.  So  long  as  the  lateral  lines  are  confined  to  local 
traffic,  they  usually  pursue  a  policy  of  neutrality  in  so  far  as  it  may  be 
practicable  for  them  to  do  so,  but  in  reality  every  new  railroad  is  a 


448 


ATLANTIC   PORT   DIFFERENTIALS 


competitor  of  all  other  roads  through  the  development  of  new  sources 
of  supply  to  the  various  markets  of  the  country. 

PACTS   INDICATING  THE   PRESENT   COURSE   OP   TRADE   BETWEEN   THE   WEST 
AND  BOSTON,  NEW  YORK,  PHILADELPHIA,  AND  BALTIMORE. 

Let  us  now  turn  to  the  consideration  of  some  of  the  facts  which  serve 
to  illustrate  the  present  course  of  trade  between  the  West  and  the  At- 
lantic seaboard. 

It  must  be  stated  at  the  outset  that  there  is  a  lack  of  statistical  and 
other  exact  information  requisite  for  a  thorough  development  of  this 
subject.  It  is  necessary,  therefore,  to  resort  to  certain  lines  of  char- 
acteristic data.  Valuable  information  of  this  kind  is  afforded  by  the 
statistics  of  the  movements  of  the  cereal  products  of  the  West.  These 
statistics  have  been  carefully  compiled  by  various  trade  organizations. 

The  transportation  of  grain  and  flour  from  the  West  to  the  seaboard 
probably  constitutes  a  little  more  than  one-half  the  entire  east-bound 
through  traffic  from  the  western  states  to  the  seaboard.  Comparative 
statements  based  upon  the  movements  of  grain  afford,  therefore,  an  ex- 
cellent illustration  of  the  general  movements  of  trade.  The  receipts  of 
grain  of  all  kinds  (including  flour)  at  Boston,  New  York,  Philadel- 
phia, and  Baltimore  during  the  calendar  years  1873,  1874,  1875,  and 
1876  were  as  follows: 


Grain   ( 

including  flour)  received. 

Year. 

Boston. 

New  York. 

Philadel- 
phia. 

Baltimore. 

Total. 

1873 

1874   

1875 

Bushels. 
17,805,906 
18,000,002 
18,351,815 
22,753,698 

Bushels. 

92,137,971 

107,273,156 

93,443,488 

95,949,242 

Bushels. 
24,949,157 
24,625,591 
28,195,330 
35,546,845 

Bushels. 
19,099,517 
24,936.208 
22,823,879 
37,564,-530 

Bu.ihels. 
153,992,551 
174,834,957 
162,814,512 

1876   

191,814,315 

Total    

76,911,421 

388,803,857 

113,316,923 

104,424,134 

683,456,335 

Comparing  the  receipts  at  each  one  of  these  ports  during  the  year 
1873  with  the  receipts  during  1876,  there  appears  to  have  been  a  gain 
in  the  total  receipts  of  grain  at  each  port,  as  follows : 


Year. 

Boston.       New  York.      Pl^iladel-       Baltimore, 
phia.         1 

'                 1 

1876    

Bu.ihels. 
22,753.698 
17,805,906 

Bushels. 
95,949,242 
92,137,971 

Bu.ihels. 
35,-546,845 
24,949,157 

10,597,688 

Bu.ihels. 
37.-564,530 
19,099,517 

1873    

Increase   

4,947,792 

3,811,271 

18,465,013 

Per  cent,  of  increase  . . . 

28  per  cent. 

4  per  cent. 

43  per  cent. 

97  per  cent. 

APPENDIX, 


449 


The  increased  receipts  at  Boston  were  nearly  30  per  cent,  greater 
than  at  New  York.  The  increased  receipts  at  Philadelphia  were  nearly 
three  times  those  at  New  York,  and  the  increased  receipts  at  Baltimore 
were  nearly  five  times  the  increase  at  New  York.  The  percentage  of 
increase  of  the  receipts  of  the  receipts  at  each  port  during  the  year 
1876  over  the  receipts  at  the  same  ports  during  1873,  exhibits  the 
growth  of  the  grain  trade  at  each  port  in  a  more  striking  manner.  The 
increase  at  Boston  was  28  per  cent.,  at  New  York  4  per  cent.,  at  Phila- 
delphia 43  per  cent.,  and  at  Baltimore  97  per  cent. 

The  exports  of  grain  at  the  several  ports  mentioned  were  as  follows: 
Grain  (including  flour)  exported. 


Year   ending   De- 
cember   31 — 

Boston.         New  York. 

Philadel- 
phia. 

Baltimore. 

Total. 

1873   

1874 

1875 

1876   

Bu^shels. 

2,145,a64 

3,186,318 

3,987,959 

6,043,298 

Bushels. 

54,020,056 
66,263,946 
50,-599,710 
55,253,686 

Bushels. 

4,807,620 

6,671,334 

8,846,658 

22,016,515 

Bushels. 
9,049,-545 
12,555.090 
11,407,499 
24,761,307 

Bushels. 

70,022,585 

88,676,688 

74,841,826 

108,074,866 

Total    

15,362,939 

226,137,398 

42,342,127 

57,773,441 

341,615,905 

Comparing  the  data  embraced  in  the  statement  of  exports  with  the 
statement  of  receipts,  it  will  be  seen  very  clearly  that  the  diversion  of 
grain  from  New  York  to  other  points  is  due  largely  to  the  export-trade, 
and  not  in  any  very  considerable  degree  to  increased  local  consumption 
or  distribution  to  points  in  the  United  States.  This  is  shown  by  the 
following  statement : 


Increased  receipts  and  exports 
of  grain,  (1876  over  1873.) 


Boston. 


New  York. 


Philadel- 
phia. 


Baltimore. 


Increase   .  . 
Increased   exports 


Bushels. 
4,947,792 
3.897,934 


Bushels. 
3,811,271 
1,233,630 


Bushels. 
10,-597,688 
17,208,895 


Bushels. 
18,465.013 
15,711,762 


]\Iaking  due  allowance  for  the  fluctuations  in  the  movements  of  com- 
merce, it  is  evident  that  the  competition  of  the  seaports  mentioned  in 
the  grain-trade  relates  mainly  to  the  exportation  of  grain  to  foreign 
countries. 

Grain  being  the  chief  commodity  now  relied  upon  for  export  cargoes 
of  vessels,  it  is  evident  that  any  great  and  permanent  increase  in  the 
grain-trade  of  any  port  must  naturally  lead  to  an  increase  of  imports 
at  that  port,  and  thus  to  a  general  diversion  of  commerce.  *  *  *  [In 
the  Appendix  to  this  report]  may  be  found  a  table  showing  the  receipts, 
exports,  and  local  consumption  of  flour  and  grain  of  all  kinds  at  Bos- 
29 


450 


ATLANTIC   PORT   DIFFERENTIALS 


ton,  New  York,  Philadelphia,  and  Baltimore  during  the  years  1873, 
1874,  1875,  and  1876,  compiled  from  statistics  prepared  by  Theo.  F. 
Lees,  general  agent  of  the  New  York  Cheap-Transportation  Associa- 
tion, By  a  careful  inspection  of  this  table  it  will  be  seen  that  the  di- 
version of  grain  which  has  been  described  is  almost  entirely  due  to 
the  diversion  of  corn  alone.  There  has  been  no  very  marked  change  in 
the  relative  receipts  and  exports  of  wheat  and  wheat-flour  at  these 
ports  since  the  year  1873,  as  appears  from  the  following  tables : 

Statement  showing  the  receipts  of  wheat  and  wheat -flour  (flour  reduced  to  hushels) 
at  Boston,  New  York,  Philadel.pliia,  and  Baltimore  during  the  years  from  1873 
to  I87fi,  inclusive,  and  the  percentage  of  such  receipts  at  each  port. 


Boston 

New  York. 

Philadelphia. 

Baltimore. 

Calrndar  Tear. 

Bushels. 

Bushels. 

i. 

Bushels. 

a  . 

CM 

Bushels. 

fe  03 
PM 

1873     

1874     

9,857,107 
10,814,452 
9,224,969 
9,689,692 

12 
11 
11 
13 

52,194,366 
62,099,422 
.54,357,147 
46,324,831 

65 

63 
61 
61 

9,346,000 
12,479,880 
13,501,750 

9,550,035 

12 
13 
15 
12 

9,373,677 
14,262,819 
11,368,885 
10,693,264 

11 

14 

1875     

13 

1876     

14 

Statement  showing  the  exports  of  wheat  and  ivheat-flour  (flour  reduced  to  bushels) 
at  Boston,  New  York,  Philadelphia,  and  Baltimore  during  the  years  from  1873 
to  1876,  inclusive,  and  the  percentage  of  such  exports  at  each  port. 


Boston 

New  York. 

Philadelphia. 

Baltimore. 

Calendar  Year. 

Bushels. 

p  it 

PLH 

td 

Percent- 
age. 

Bushels. 

a  . 

PM 

Bushels. 

a  . 

1873     

1,642,933 
2, 500, 9.^6 
2,140,341 
1,456,870 

4 
5 
4 
3 

36  061  744  1      R-'^ 

2,^4,015 
2,222,848 
4,105,794 
3,926,074 

6 

4 
8 
9 

2,955,927 
6,384,009 
4,329,879 
3,832,221 

7 

1S74     

45,701,447 
36,076,679 
34,720,245 

80 
79 
79 

11 

1875     

9 

1876     

9 

It  also  appears  from  the  folloM^ng' statements  that  there  has  been 
little  relative  change  in  the  receipts  of  oats  and  barley  at  the  four  prin- 
cipal Atlantic  seaports. 

Statement  showing  the  receipts  of  oats  and  barley  at  Boston,  Neiv  York,  FhUadel- 
phia,  and  Baltimore  during  the  uears  from  1873  to  1876,  inclusive,  and  the  i^er- 
centage  of  such  receipts  o,t  each  port. 


Boston. 

New  York. 

Philadelphia. 

Baltimore. 

Calendar  Year. 

Bushels. 

So; 

S3* 

Ph 

Bushels. 

d  . 

0  0) 

«  bo 

Ph 

Bushels. 

S3  oj 
0  bo 

Bushels. 

fees 

Ph 

1873     

3,996,213 
3,455,884 
3,363,940 
3,420,8.39 

16 
15 
13 
13 

12,833,500 
12,952,980 

14,595,094 
17,008,904 

51 
54 
57 
62 

7,042,457 
5,941,900 
6,473,100 
5,838,850 

28 
26 
26 
22 

1,255,072            5 

1,149,188             5 

977  514             4 

1874     

1875     

1876     

810  282             ^ 

APPENDIX. 


451 


Statement  shmrwq  the  exports  of  oats  and  barley  at  Boston,  New  York,  Philadel- 
phia, and  Baltimore  durinq  the  years  from  1873  to  1876,  inclusive,  and  tlie  per- 
centage of  such  receipts  at  each  port. 


It  appears  from  the  foregoing  statements  there  has  been  no  marked 
change  in  the  course  of  the  traffic  in  wheat,  oats,  and  barley,  owing  to 
the  fact  that  the  receipts  of  those  grains  at  the  seaports  are  very  largely 
for  local  consumption  or  for  shipment  to  points  along  the  Atlantic 
seaboard  in  the  United  States,  and  therefore  that  the  transportation 
of  those  commodities  is  competitive  in  a  comparatively  low  degree. 

It  appears,  however,  from  the  following  statements,  that  the  corn 
traffic  is  subject  to  very  different  conditions  in  so  far  as  relates  to  com- 
petition between  the  several  trunk  lines  and  between  the  four  princi- 
pal Atlantic  seaports. 

Statement  showinp  the  receipts  of  corn  at  Boston.  New  Yorl',  Fhihidclpliia,  and 
Baltimore  during  the  years  from  1873  to  1876,  inclusive,  and  the  percentage  of 
such  receipts  at  each  port. 


Boston. 

New  York. 

Philadelphia. 

Baltimore. 

Calendar  Tear. 

Bushels. 

•ti 

a   . 

V  S) 

a, 

Bushels.        1  g 

Bushels. 

4^ 

a   . 

Bushels. 

+3 

a  . 

Oh 

1873     

5,558,363 
3,308,041 
5,346,340 

9,005,375 

12 

8 
12 
11 

24,680,831 
29,661,443 
22,183,077 
26,645,599 

52 
61 
50 
34 

8,238,400 

5,954,700 

7,960,000 

19,420,825 

17 
10 
17 
25 

8,830,449 

9,355,567 

9,567,141 

24,684,230 

19 

1874    

21 

1875     

21 

1876     

30 

Statement  showing  the  exports  of  corn  at  Boston,  New  Yorlc,  Philadelphia,  and 
Baltimore  during  the  years  from  1873  to  1876,  inclusive,  and  the  percentage  of 
such  exports  at  each  port. 


Boston. 

New  York. 

Philadelphia. 

Baltimore. 

Calendar  Tear. 

Bushels. 

d   . 

feoj 

to 

Percent- 
age. 

to 

Percent- 
age. 

Percent- 
age. 

1873     

162,727 

380,254 

1,551,576 

4,160,817 

1 
2 
6 

7 

16,168,152 
18,647.114 
12,980,670 
16,470,935 

65 
68 
49 
28 

2,202,368 
2,203,588 
4, 601,. 586 
16,754,718 

9 
8 
18 
29 

6,093,618 

5,959,767 

6,980,442 

20,751,343 

or 

1874     

22 

1875    

o- 

1876    

36 

452 


ATLANTIC   PORT   DIFFERENTIALS 


The  foregoing  statements  in  regard  to  corn  indicate  that  there  has 
been  a  very  marked  change  in  its  movements  to  the  seaboard,  and  that 
this  change  is  due  almost  exclusively  to  the  exportation  of  it  to  Europe, 

Each  one  of  the  trunk  lines  having  nearly  equal  advantages  for  the 
foreign  trade  afforded  by  steamer-lines  and  sailing-vessels  to  ports'  in 
Europe,  the  cost  of  transportation  by  these  several  routes  from  western 
points  to  the  grain  markets  of  Europe  is  very  nearly  equal.  There- 
fore, as  already  explained,  the  corn  traffic  is  competitive  in  a  very  high 
degree,  both  with  respect  to  the  interests  of  the  trunk  lines  and  of  the 
four  principal  Atlantic  seaports. 

The  following  statement  shows  the  increased  receipts  of  grain  during 
1876  over  those  of  1873,  in  comparison  with  the  increased  receipts  of 
corn  during  1876  over  those  of  1873: 


r— 

Increased  receipts  of  1876  over 
those  of  1873. 

Port. 

Boston. 

New  York. 

Philadel-    !     .p,  ,.. 

,  .               Baltimore, 
phia. 

Bushels. 
Increased  receipts  of  grain   .  . .      4,947,790 
Increased  receipts  of  corn   ....      3,447,012 

Bushels. 
3,811,271 
1,964,768 

Bushels. 

10,,597,6S8 
11,182,425 

Bii!-hels. 
18,465,013 
15,853,781 

This  statement  very  clearly  shows  that  the  diversion  of  the  grain- 
trade  from  New  York  and  the  increase  in  the  grain  receipts  at  Boston, 
Philadelphia,  and  Baltimore  is  due  almost  entirely  to  the  diversion  of 
the  corn-trade  alone. 

"While  the  exportation  of  wheat,  flour,  rye,  oats,  and  barley  has  ex- 
hibited little  change  with  respect  to  the  interests  of  the  various  trunk 
lines  and  of  the  Atlantic  seaports,  the  expoi'tation  of  corn  has  changed 
as  follows :  The  exporation  from  Boston  has  increased  from  1  to  7  per 
cent. ;  at  New  York  it  has  decreased  from  65  to  28  per  cent. ;  at  Phila- 
delphia it  has  increased  from  9  to  29  per  cent. ;  and  at  Baltimore  it  has 
increased  from  25  to  36  per  cent,  of  the  total  receipts  at  the  four  ports. 

This  remarkable  diversion  in  the  corn-trade  appears  to  be  mainly  at- 
tributable to  the  following  causes : 

First.  Corn  being  a  commodity  of  low  value  in  proportion  to  weight, 
its  movements  have  been  greatly  influenced  by  the  small  difference  in 
rates  which  have  prevailed  in  favor  of  the  Pennsylvania  and  the  Balti- 
more and  Ohio  Railroads,  in  consequence  of  the  excellent  facilities  for 
the  transfer  of  grain  from  railroad-cars  to  steamships  at  the  ports  of 
Philadelphia  and  Baltimore,  in  connection  with  the  arrangements 
Avhich  have  been  perfected  at  those  ports  for  the  direct  shipments  of 
grain  from  interior  points  to  Europe. 


APPENDIX  453 

Second.  The  cargoes  from  the  United  States  to  Europe  being  uow 
much  in  excess  of  the  import-cargoes,  vessel-owners  are  free  to  seek  ex- 
port-cargoes wherever  they  can  be  obtained,  and  the  advantage  as  to 
the  available  supply  of  ocean-tonnage  does  not  operate  so  strongly  in 
favor  of  New  York  as  formerly. 

Other  conunodities  for  which  the  Pennsylvania  Railroad  and  the 
Baltimore  and  Ohio  Railroads  afford  direct  transportation  in  connec- 
tion Avith  ocean-lines  to  Europe  have  also  to  a  considerable  extent  fol- 
lowed the  direction  of  the  corn-trade.  It  is,  however,  declared  by  those 
who  are  familiar  with  the  grain-trade  that  the  diversion  of  corn  from 
New  York  to  other  ports  during  the  year  1876  was  very  largely  due  to 
an  exceptional  circumstance  affecting  the  crop  of  the  year  1875.  It  is 
said  that  the  corn  crop  of  the  northern  corn-producing  district  was  in- 
jured by  dampness,  and  did  not  come  to  maturity,  so  that  it  reached 
the  market  in  a  bad  condition  and  unfit  for  exportation,  whereas  the 
crop  of  the  southern  portion  of  the  corn-producing  area  came  to  ma- 
turity in  good  condition,  and  was  alone  available  for  meeting  a  large 
and  unexpected  foreign  demand. 

The  foregoing  facts  have  been  adduced  with  the  view  of  showing  as 
clearly  as  possible,  by  available  characteristic  data,  that  there  are  very 
many  conditions  affecting  the  competitive  traffic  between  the  west  and 
the  seaboard,  that  these  conditions  are  variable,  and  that  they  are  so 
intimatedly  blended  that  it  is  impossible  to  prescribe  geographical  or 
commercial  limits  to  the  traffic  of  any  line  or  to  the  trade  of  any  sea- 
board city. 

It  is  impossible  within  the  prescribed  limits  of  this  report  to  consider 
more  fully  the  comparative  advantages  held  by  the  various  seaports  for 
supremacy  or  for  the  control  of  any  particular  branch  of  commerce. 
The  facts  stated  fall  far  short  of  a  complete  development  of  this  great 
and  important  subject,  for  it  embraces  all  the  elements  of  the  pros- 
perity of  commercial  cities,  including  their  capital,  the  force  of  asso- 
ciated enterprises,  the  energy,  tact,  and  persistency  of  their  merchants, 
the  manner  in  which  their  interests  are  affected  by  the  tariff  upon  im- 
ported goods,  and  by  the  rapidly-increasing  power  of  American  manu- 
facturers, the  geographical  position  of  water  and  rail  lines,  and  the 
available  supply  of  coal,  iron,  lumber,  and  all  other  commodities  which 
go  to  meet  the  wants  or  to  contribute  to  the  commerce  of  a  great  city. 

Facts  which  indicate  the  relative  magnitude  of  the  commerce  of  the 
four  principal  Atlcmtic  seaports. 

There  are  no  available  data  affording  an  accurate  comparative  view 
of  the  total  internal  and  foreign  commerce  of  the  various  seaports 


454 


ATLANTIC    PORT   DIFFERENTIALS 


based  upon  either  the  quantity  or  the  value  of  commodities.  The  fol- 
lowing statement  in  regard  to  bank  clearing-house  transactions  at  Bos- 
ton New  York,  Philadelphia,  and  Baltimore  affords  an  approximate 
indication  of  the  relative  magnitude  of  the  commerce  of  the  four  cities. 
To  what  extent  the  clearances  at  New  York  embrace  transactions  not 
properly  representative  of  the  commerce  of  that  port  cannot  be  ascer- 
tained. 

Clearing -house  returns  for  the  month  of  January,  :I877. 


Cities. 


S    c3 
d   ^ 


^  .a 


New  York    . 

Boston 

Philadelphia 
Baltimore   .  . 


Total 


59 
51 
27 
20 


157 


$72,052,000 
8,436,000 
6,826,000 
1,853,000 


89,167,000 


81 
9 


100 


The  relative  value  of  the  foreign  commerce  of  the  four  principal  At- 
lantic seaports  is  presented  in  the  following  table,  showing  the  value  of 
imports  and  exports  at  each  one  of  these  ports  during  the  year  ending 
June  30,  1876 : 


Cities. 

II 

OJ    o 

C3 
> 

Total  value 
of  foreign 
commerce. 

*J    o 

a  ft 

o 

New  York   

$311,712,910 
37,416,623 
22,471,516 
22,340,629 

393,941,678 

$294,705,902 
36,041,892 
40,254,075 
31,216,807 

$606,418,812 
73,458,515 
62,725,591 
53,557,436 

76.2 

Boston    

9.3 

Philadelphia    

7.8 

Baltimore 

6.7 

Total    

402,218,676 

796,160,354 

100.0 

The  clearing-house  transactions  at  New  York  appear  to  constitute  81 
per  cent,  of  the  total  clearing-house  transactions  at  Boston,  New  York, 
Philadelphia,  and  Baltimore,  and  the  foreign  commerce  of  New  York 
appears  to  be  76  per  cent,  of  the  total  foreign  commerce  of  the  same 
cities. 

These  statistics,  in  connection  with  the  facts  already  presented  in  re- 
gard to  the  grain-trade,  prove  that  the  movements  of  any  particular 
commodity,  even  one  of  prime  necessity,  do  not  afford  an  indication  of 
the  general  course  of  trade  or  of  the  relative  magnitude  of  the  com- 


APPENDIX  455 

merce  of  the  great  seaports.  Although  a  hirger  quantity  of  corn  is 
passing  through  Baltimore  than  through  New  York,  the  total  couinieree 
of  Baltimore,  in  so  far  as  indicated  by  clearing-house  transactions,  is 
but  21/^  per  cent,  of  the  commerce  of  New  York,  and,  in  so  far  as  in- 
dicated by  exports,  the  connnerce  of  Baltimore  is  less  than  9  per  cent, 
of  the  value  of  the  foreign  connnerce  of  New  York.  There  is  a  certain 
territory  directly  tributary  to  the  trade  of  Baltimore,  and  each  one  of 
the  Atlantic  seaports  has  a  separate  local  trade,  and  enjoys  peculiar 
advantages  for  trade  with  the  West,  with  the  South,  and  with  foreign 
countries.  The  city  of  New  York  can  rely  for  the  maintenance  of  its 
commercial  supremacy  upon  its  enormous  capital;  the  geographical 
advantages  of  its  position  as  a  distributing  point;  its  direct  connec- 
tions with  all  parts  of  the  United  States  by  rail  and  water  lines ;  the 
exclusive  advantages  of  that  important  line  of  transportation  formed 
by  the  lakes,  the  Erie  Canal,  and  the  Hudson  River ;  the  persistency  of 
its  established  commercial  relations  with  almost  every  country  on  the 
globe ;  the  energ>^  and  intelligence  of  its  merchants,  and  the  facts  that 
it  is  the  chief  monetary  center  of  the  western  continent. 

The  foregoing  statistics  in  regard  to  the  movements  of  grain  simply 
serve  to  illustrate  certain  important  trade  currents  and  to  throw  light 
upon  the  question  of  transportation,  but  they  evidently  fall  very  far 
short  of  conveying  adequate  information  upon  Avhich  can  be  based  any 
prediction  as  to  the  future  prosperity  or  decadence  of  commercial  cities. 

GENERAL  RAILROAD   MANAGEMENT  IN   REGARD   TO   THROUGH   TRAFFIC. 

The  facts  already  presented,  which  point  to  the  impracticability  of 
drawing  any  exact  lines  of  demarkation  between  the  local  and  the  com- 
petitive traffic  of  the  several  trunk  lines  and  between  the  local  and  the 
competitive  trade  of  the  several  seaboard  cities,  also  serve  to  throw 
light  upon  the  competitive  struggles  between  the  railroads  connecting 
the  "West  with  the  seaboard,  and  to  explain  the  difficulties  which  the 
managers  of  these  lines  have  encountered  in  their  efforts  to  protect 
themselves  against  themselves — efforts  which  have  generally  termi- 
nated in  the  often-recurring  and  protracted  railroad  wars.  The  effort 
to  adjust  competitive  rates  between  the  West  and  the  seaboard  began 
about  twenty  years  ago,  when  the  Erie  and  the  Ncav  York  Central  Rail- 
roads had  extended  their  lines  to  Lake  Erie,  and  the  Pennsylvania  and 
the  Baltimore  and  Ohio  Railroads  had  reached  the  Ohio  River.  Then 
the  adjustment  of  through  rates  was  simply  a  question  of  detail  in  the 
discharge  of  the  executive  duties  of  general  freight  agents ;  but  it  has 
now  become  a  great  question  of  administration,  affecting  the  entire 
internal  and  foreign  commerce  of  the  United  States.     The  increased 


456  ATLANTIC    PORT   DIFFERENTIALS 

magnitude  of  the  interests  affected  lias  rendered  it  necessary  to  adopt 
new  methods  in  the  management  of  competitive  traffic,  and  has  called 
for  the  employment  of  men  endowed  with  the  intellectual  grasp  and 
vigor  requisite  for  comprehending  and  administering  the  affairs  of  a 
great  railroad  organization.  Men  capable  of  adjusting  the  freight- 
tariffs  of  a  railroad  so  long  as  its  traffic  was  practically  a  monopoly, 
and  the  only  question  as  to  rates  was  "how  much  each  commodity 
would  bear,"  have  been  superseded  by  a  class  of  men  of  broader  views, 
competent  to  understand  and  to  grapple  with  the  difficulties  incident 
to  the  management  of  the  transportation  and  commercial  interests  of 
the  present  day. 

The  internal  commerce  of  the  country  is  year  by  year  becoming  more 
complex  as  the  interests  of  transportation  and  of  trade  increase  in  mag- 
nitude and  importance.  No  one  forsaw  the  results  already  reached  by 
the  railroad  system.  Certain  customs  with  respect  to  traffic  and  travel 
on  railroads,  have  been  established  and  have  become  authoritative 
under  decisions  of  the  State  and  Federal  courts.  Other  customs  touch- 
ing the  relations  of  the  railroads  to  each  other  and  to  the  public  will 
undoubtedly  in  time  acquire  the  force  of  law.  Thus  we  may  expect 
that  by  the  slow,  but  sure  process  of  adjustment  the  rights  of  the  rail- 
roads and  of  the  public,  with  respect  to  all  the  new  issues  of  transporta- 
tion, will  in  time  become  tirmly  established  and  that  competition  will 
remain  the  stimulus  and  the  vital  force  of  commercial  enterprise. 

TERMINAL   FACILITIES. 

There  is  another  subject  touching  the  interests  of  the  great  trunk 
lines  and  of  the  several  seaport  cities,  which  is  worthy  of  special  no- 
tice, and  that  is  the  question  of  terminal  facilities.  The  direct  convey- 
ance of  merchandise  without  breaking  bulk,  from  the  point  of  ship- 
ment to  the  point  of  destination,  and  the  most  approved  facilities  for 
the  transfer  of  freights  from  one  vehicle  of  commerce  to  another,  where 
such  transfers  must  necessarily  be  made,  constitute  very  important 
commercial  requirements  of  the  present  day.  To  effect  the  former  ob- 
ject, ''through  freight-lines"  have  been  formed  and  expensive  bridges 
have  been  constructed  across  navigable  streams.  Railroad  companies 
have  also  provided  union  depots  in  many  of  the  large  cities  for  the 
economical  transfer  of  both  freights  and  passengers.  Elevators  and 
warehouses  have  been  constructed  at  ports  on  the  coast,  on  the  lakes, 
and  on  the  western  rivers,  in  order  that  freights  might  be  cheaply  and 
expeditiously  transferred  from  one  vehicle  to  another,  and  that  ad- 
vantage might  thus  be  taken  of  the  different  markets.  Very  much, 
however,  remains  to  be  done  in  this  direction.     It  is  stated  that  in  cer- 


APPENDIX  457 

tain  cities  the  cost  of  transferring  freights  from  one  railroad  to  another 
through  warehouses  exceeds  the  charges  for  transporting  the  same 
freights  six  or  seven  hundred  miles.  It  is  also  stated  that  in  one  of 
the  large  seaboard  cities  the  cost  of  handling  and  carting  freight,  ex- 
clusive of  the  losses  from  damage  and  theft,  so  frequent  under  the 
present  disjoined  system,  is,  on  the  average,  about  $2  per  ton,  or  25  per 
cent,  of  the  cost  of  hauling  grain  from  Chicago  to  New  York. 

One  of  the  most  important  economies  of  the  present  day  with  respect 
to  trade  between  the  West  and  the  seaboard  is  the  transportation  and 
storage  of  grain  in  bulk.  This  important  economy  has  not  only  ren- 
dered it  necessary  to  supply  suitable  ears  and  elevators  at  terminal 
points,  but  also  to  establish  a  system  of  grading  under  which  the  rail- 
road companies  are  enabled  to  avoid  the  inconvenience  and  expense 
of  keeping  separate  each  particular  shipment,  and  to  deal  with  grain 
in  great  masses.  Experience  has  proved  the  necessity  of  extending 
railroad  tracks  into  the  business  portion  of  commercial  cities  for  the 
purpose  of  effecting  the  receipt  and  delivery  of  goods  of  all  kinds  with 
the  least  possible  expense  of  handling  and  cartage.  This  is  a  require- 
ment which  has  only  been  properly  appreciated  during  the  last  five  or 
six  years.  Formerly  a  railroad  depot  within  the  limits  of  a  city  was 
regarded  as  in  some  sense  a  nuisance,  to  be  tolerated  only  at  the  very 
outskirts. 

The  necessity  of  providing  the  amplest  means  for  the  flow  of  com- 
merce has  led  to  the  establishment  of  excellent  terminal  facilities  at 
Boston,  Philadelphia,  and  Baltimore.  The  city  of  New  York  has  not 
yet  fully  come  up  to  the  new  order  of  conuneyeial  requirements  in  this 
regard,  and  the  fact  has  already  operated  prejudicially  to  the  interests 
of  that  citj^  There  are  several  reasons  for  this  tardiness  at  the  chief 
commercial  center  of  the  western  continent.  Extensive  and  very 
costly  facilities  were  provided  many  j'cars  ago,  especially  adapted  to 
the  requirements  of  commerce  on  the  Erie  Canal  and  the  Hudson  River 
in  connection  with  ocean  commerce,  the  harbor  of  New  York  being  the 
great  distributing  depot  of  that  commerce.  But  in  addition  to  these 
facilities  the  success  of  commercial  enterprises  now  requires  a  line  of 
adaptations  embracing  the  ship,  the  railroad  car,  and  the  modern  ware- 
house, with  its  appropriate  spaces  and  mechanical  improvements.  The 
commercial  habits  of  the  great  city  of  New  York  were  formed  during 
the  period  in  which  she  attained  her  commercial  ascendency,  and  while 
the  Erie  Canal  remained  almost  the  sole  avenue  of  commerce  between 
the  West  and  the  seaboard.  It  appears  to  be  necessary  in  advancing  to 
the  new  order  of  things  to  overcome  the  force  of  a  conservatism  forti- 
fied by  the  habits  of  half  a  century  and  involving  millions  of  capital. 


458  ATLANTIC   PORT   DIFFERENTIALS 

A  difference  of  views  as  to  the  plans  which  should  be  adopted  has  led 
to  delay  at  New  York,  but  it  may  be  confidently  predicted  that  the 
merchants  and  capitalists  of  that  city  will  not  in  the  end  fail  to  make 
the  best  possible  use  of  all  the  means  which  nature  and  art  have  placed 
within  their  power. 

A  plan  has  been  proposed  by  the  New  York  Cheap  Transportation 
Association  and  endorsed  by  several  of  the  commercial  bodies  of  that 
city.  This  plan  embraces  railroad  tracks  around  the  entire  city,  with 
warehouses  upon  or  adjacent  to  the  wharves,  such  warehouses  being- 
provided  with  ample  facilities  for  the  loading  and  unloading  of  all 
classes  of  freights.  Terminal  facilities  of  this  character  have  been 
adopted  at  Portland,  Me.,  at  Boston,  at  Philadelphia,  and  at  Baltimore. 
The  plan  proposed  or  some  other  practical  one  will  undoubtedly  be 
adopted  at  New  York.  Venice  was  reclaimed  from  the  sea,  and  her 
canals,  wharfage  and  warehouse  facilities  were  adapted  to  the  peculiar 
exigencies  of  her  commerce.  Vast  docks  have  been  constructed  at  Lon- 
don and  Liverpool  at  enormous  expense,  in  order  to  meet  the  demands 
of  commerce,  and  to  provide  against  the  difficulties  incident  to  the  rise 
and  fall  of  the  tides,  and  those  cities  have  in  their  turn  become  the  cen- 
ters of  European  conmierce.  New  York  City  cannot  long  delay  pro- 
viding a  system  of  terminal  facilities  adapted  to  the  requirements  of 
the  present  day  and  commensurate  with  the  magnitude  of  her  enormous 
commerce, 

CONCLUDING  REMARKS  IN  REGARD  TO  COMPETITION  IN  THE  COMMERCE  BE- 
TV^TEEN  THE  WEST  AND  THE  SEABOARD. 

The  practical  difficulties  which  have  arisen  as  the  result  of  competi- 
tion between  railroads  and  between  rival  markets  embrace  the  more 
salient  features  of  what  is  cormnonly  known  as  "the  railroad  problem 
of  the  day. ' '  During  the  last  three  years  there  has  been  much  specu- 
lation as  to  the  tendency  of  our  railroad  system,  and  as  to  the  remedies 
which  should  be  provided  against  existing  or  anticipated  evils.  For 
many  years  it  was  apprehended  that  the  railroads  might  become  abso- 
lute monopolies,  and  that  competition  in  the  carrying  trade  might  be 
utterly  broken  down,  but  within  the  last  two  years  it  has  been  urged 
that  competition  has  failed  to  secure  the  ends  of  justice  and  stability, 
and  therefore  that  it  is  no  longer  to  be  relied  upon.  It  is  asserted  that 
competition  is  an  irresponsible  force,  that  its  essence  is  instability,  and 
that  so  long  as  it  continues,  systematic  justice  cannot  be  done.  This 
conclusion  appears  to  be  based  upon  the  assumption  that,  in  the  com- 
merce between  the  West  and  the  seaboard,  the  struggle  is  confined  to 
four  or  five  great  railway  organizations.     It  has,  how^ever,  been  herein- 


APPENDIX  459 

before  shown  that  the  struggle  embraces  the  competition  of  many  lines 
and  of  many  commercial  forces,  which  overshadow  the  power  exercised 
by  the  managers  of  the  great  trunk  lines.  This  is  clearly  understood, 
and  in  practice  fully  recognized  by  men  engaged  in  extensive  mer- 
cantile operations,  and  by  the  managers  of  great  railroad  interests. 
The  evils  incident  to  competition  are  sharply  defined  and  incisive,  but 
the  benefits  which  it  affords  are  substantial  and  pervading.  The  bene- 
ficent law  of  supply  and  demand  where  it  operates  most  freely  may 
not  secure  systematic  justice,  and  yet  the  whole  world  concedes  that,  so 
far  as  it  is  operative,  it  secures  substantial  justice.  This  is  all  that 
can  be  expected  in  the  present  condition  of  human  affairs.  Competi- 
tion may  not  make  all  things  even,  but  it  affords  a  nearer  approach  to 
equitable  dealing  among  men  than  any  substitute  which  has  3'et  been 
proposed  for  the  natural  laws  of  trade.  The  very  instability  of  com- 
petition is  the  surest  safeguard  of  the  public  interest.  When  compe- 
tition ceases  to  be  irresponsible,  monopoly  will  step  in,  unless  it  be 
substituted  by  the  autocratic  rule  of  a  combination  sufficiently  power- 
ful to  control  all  the  transportation-lines  of  the  country.  Any  arbi- 
trary rule  in  whatever  manner  formulated,  or  by  whatever  agency  ex- 
ercised, would  prove  to  be  an  impotent  substitute  for  the  great  bene- 
ficient  law  of  competition  in  the  irresponsibility  and  instability  of 
which  is  embraced  that  conservatism  which  inheres  in  the  untrammeled 
operations  of  natural  forces. 

So  intimately  are  the  interests  of  transportation  and  of  trade  con- 
nected that  it  is  impossible  to  eliminate  competition  beween  the  rail- 
roads without  doing  violence  to  conunercial  interests,  and  thereby 
working  greater  evils  than  those  sought  to  be  removed.  It  is  well 
known  that  within  the  restraints  imposed  by  the  various  forces  of  com- 
petition, a  comparatively  narrow  range  of  discretionary  power  is  left 
to  the  railroad  companies  in  regard  to  their  "through  traffic."  The 
rates  which  have  at  times  prevailed  especially  for  the  transportation 
of  grain  on  the  east  and  west  trunk  lines  during  the  last  two  years  are 
said  to  have  involved  an  actual  loss  to  the  companies.  Earnest  efforts 
have  been  made  by  the  managers  of  the  great  trunk  lines  to  advance 
freight  charges,  but  the  competition  has  been  so  strong  that  they  have 
been  unable  to  effect  that  object.  The  public  have  thus  secured  the 
benefits  of  cheap  transportation. 

But  the  practical  results  of  competition  between  railroads  and  be- 
tween trade  forces  are  before  us,  and  we  may  learn  the  effects  of  these 
forces  upon  the  adjustment  of  freight-tariffs.  The  following  table 
presents  the  average  charges  per  ton  per  mile  during  the  last  eight 
years  on  several  important  trunk  lines  of  the  United  States  largely  en- 
gaged in  transportation  between  the  West  and  the  seaboard. 


460 


ATLANTIC  PORT  DIFFERENTIALS 


Statement  showmff  the  pradual  reduction  in  freight-cJmrges  per  ton  per  mile  on 
several  transportation-lines  enpaped  in  commerce  between  the  Western  States 
and  the  Atlantic  seaboard,  from  1868  to  1876,  inclusive. 


Railroads. 

Tears. 

1868 

1S69 

1870 

1871 

1872 

1873 

1874 

1875 

1876 

Cents 
2.59 
1.90 
1.92 
.88 
2.43 

Cents 
2.20 

Cents 
1.86 

Cents 
1.65 
1.34 
1.47 
1.02 
2.02 
1.85 
1.39 
1.56 
2.19 
2.87 

Cents 
1.69 
1.42 
1.52 
1.02 
1.96 
1.46 
1.37 
1.57 
2.18 
2.51 

Cents 
1.57 
1.42 
1.45 
.88 
1.82 
1.36 
1.33 
1.30 
1.92 
2.35 

Cents 
1.47 
1.26 
1.31 
.73 
1..53 
.94 
I.IS 
1.16 
1.90 
2.10 

Cents 
1.27 
1.06 
1.21 

.66 
1.11 

.87 
1.01 
l.OS 
1.91 
1.95 

Cents 
1.05 

1.72  i  1..55 

.89 

Erie    

1.60 

.92 

2.19 

1.37 

.83 

2.09 

1.07 

.68 

Lalie  Shore  and  Michigan  Southern  

2.43 
2.09 
3.01 
3.13 

2.34 
1.S8 

1.50 
1  61 

.82 

Chicago,   Burlington   and  Quiney    

2.77  1  2.31 
3.09 

Average    

2.26 

.97      1.91 

1.74 

1.67 

1.54 

1.36 

1.21 

N.  B.— In  this  table  the  calendar  year  nearest  the  several  fiscal  years  is  taken. 

It  appears  that  the  average  rates  on  the  New  York  Central  Railroad 
fell  from  2.59  cents  per  ton  per  mile  in  1868  to  1.05  cents  per  ton  per 
mile  in  1876,  a  fall  of  59  per  cent. ;  the  rates  on  the  Pennsylvania  Rail- 
road fell  from  1.90  cents  in  1868  to  .89  of  a  cent  in  1876,  a  fall  of  53 
per  cent. ;  the  rates  on  the  Erie  Railway  fell  from  1.92  cents  in  1868  to 
1.07  cents  in  1876,  a  fall  of  44  per  cent. ;  and  that  the  rates  on  the  New 
York  State  canals  fell  from  .88  of  a  cent  in  1868  to  .68  of  a  cent  in 
1876,  a  fall  of  23  per  cent. 

It  appears  that  the  annual  average  of  the  rates  stated  in  the  forego- 
ing table  fell  from  2.26  cents  per  ton  per  mile  in  1868  to  1.21  cents  per 
ton  per  mile  in  1875,  a  fall  of  nearly  50  per  cent,  in  eight  j-ears.  This 
decrease  has  not  resulted  from  voluntary  concessions  by  the  great 
trunk  lines  over  which  passes  a  very  large  proportion  of  the  internal 
commerce  of  the  country,  but  from  causes  beyond  their  control,  and 
against  which  they  have  striven  earnestlj'  but  in  vain.  Another  most 
significant  fact  is  the  fall  of  all-rail  grain-rates  from  Chicago  to  New 
York  from  45  cents  per  100  pounds  in  1869,  to  16  cents  per  100  pounds 
during  a  part  of  the  j^ear  1876,  the  rates  during  the  latter  year  being 
little  more  than  one-third  of  those  which  prevailed  but  seven  years 
before. 

These  facts  carry  with  them  their  own  argument.  The  reductions  in 
freight-charges  are  the  result  of  competition,  and  they  have  been  of 
incalculable  advantage  to  the  commercial  and  the  agricultural  interests 
of  the  country. 

Attention  is  called  to  the  fact  that  the  foregoing  table  illustrates  the 
average  reduction  of  rates  on  both  'Hhrough"  and  "local"  traffic,  the 
local  traffic  of  all  the  roads  being  the  chief  source  of  revenue.     The  re- 


APPENDIX  461 

duction  of  local  rates  has  resulted  mainly  from  competition  between 
the  various  markets  of  the  country,  a  result  in  conformity  with  the 
general  reduction  of  prices  during  the  last  four  years. 

Local  rates  are  still  remunerative,  and  it  is  believed  that  "competi- 
tive rates"  may,  within  the  limits  of  clearly-defined  mutual  interests, 
be  so  adjusted  through  cooperation  as  not  to  entail  losses  upon  the  com- 
panies. No  scheme  of  adjustment,  however,  can  override  the  forces  of 
competition,  and  all  attempts  of  the  kind  must  result  in  disaster. 

It  has  been  supposed  that  in  the  contests  between  the  trunk  lines  the 
strongest  company  or  combination  of  companies  invariably  remains 
master  of  the  field.  It  has,  however,  come  to  be  almost  an  aphorism 
among  railroad  managers  that  the  weakest  line  determines  the  rates. 
It  has  been  seen  at  Boston  that  in  the  struggles  between  the  Grand 
Trunk  Railroad  on  the  one  side,  and  the  New  York  Central,  the  Erie, 
and  the  Pennsylvania  Railroads  on  the  other,  the  Grand  Trunk  Road, 
the  weakest  of  them  all,  has  remained  master  of  the  field.  The  causes 
of  this  apparently  paradoxical  result  have  already  been  explained. 

It  has  also  been  supposed  that  the  combination  between  the  railroads 
of  the  country  is  yearly  becoming  closer  and  more  powerful.  The 
facts  which  have  been  hereinbefore  adduced  seem  to  indicate,  however, 
that  the  extension  of  the  railway  system  has  tended  to  create  new  ele- 
ments of  competition,  and  to  render  the  adjustment  of  through  rates 
more  difficult.  Every  trunk  line  has  many  interests  outside  of,  and 
which  cannot  possibly  be  embraced  within  the  terms  of  any  combina- 
tion with  other  trunk  lines,  and  it  has  been  found  that  sooner  or  later 
these  collateral  interests  lead  to  the  infraction  of  any  conditions  which 
the  ingenuity  of  railroad  managers  has  yet  been  able  to  devise.  The 
difficulty  appears  to  be  that,  heretofore,  competing  companies  in  at- 
tempting to  protect  themselves  against  themselves,  have  failed  to  ar- 
rive at  a  clear  understanding  of  the  nature  and  limits  of  their  mutual 
interests. 

As  the  promoters  of  the  great  railroad  organizations  connecting  the 
West  with  the  seaboard  have  pushed  their  lines  westward,  they  have 
seen  their  control  over  ''through  rates"  gradually  becoming  weaker 
and  weaker,  and  the  idea  has  been  suggested  in  the  interests  of  the  rail- 
road companies,  by  able  men,  that  the  roads  ought  to  invoke  some 
external  aid  in  order  to  maintain  remunerative  rates,  or  at  least  to 
avoid  the  necessity  of  at  times,  carrying  through  freight  at  an  absolute 
loss.  Evidently,  it  would  be  detrimental  to  the  public  interests  if  the 
railroads  of  the  country  were  to  become  crippled  by  their  own  excesses, 
but  in  view  of  the  beneficial  results  which  have  been  realized  from  the 
regulating  influence  which  competition  has  exerted  over  rates  in  the 


i62  ATLANTIC    PORT   DIFFERENTIALS 

great  commerce  between  the  West  and  the  East,  and  between  all  im- 
portant centers  of  trade  which  enjoy  the  advantages  of  two  or  more 
rival  lines,  the  people  will  watch  with  favor  the  gradual  extension  of 
the  railway  system  by  which  means  the  limits  of  the  local  or  non-com- 
petitive traffic  are  being  contracted  and  the  limits  of  the  competitive 
traffic  enlarged. 

It  appears  probable  that  as  the  facilities  of  transportation  are  more 
widely  extended  many  injurious  discriminations  will  disappear,  and 
that  the  legitimate  limits  of  the  traffic  of  rival  companies  will  become 
more  clearly  defined.  It  is  also  to  be  hoped  that  the  various  companies 
will,  upon  enlightened  views  of  self-interest,  formulate  and  acquiesce 
in  such  regulations  with  respect  to  their  common  interests  as  to  prevent 
the  occurrence  of  those  sudden  changes  of  rates  which  cause  erratic 
diversions  of  traffic  from  one  line  to  another;  results  which  tend  to 
destroy  confidence  not  only  in  railroad  securities,  but  in  the  value  of 
the  entire  property  of  commercial  cities.  Such  changes  of  rates  tend 
to  depress  and  not  to  advance  commerce. 


Inter-  and  Inyra-Territorial  Bases  of  Rates  in  Official  Classi- 
fication AND  New  England  Territories  Including  the 
Atlantic  Port  Differentials. 

Following  its  Report  on  Supplemental  Hearing  (32  I.  C.  C.  325) 
in  the  Five  Per  Cent.  Case  (I.  C.  C.  Docket  No.  5280,  Revenues  of 
Rail  Carriers  in  Official  Classification  Territory  and  I.  &  S.  333,  Rate 
Increases  in  Official  Classification  Territory)  the  Interstate  Commerce 
Commission  entered  an  Order,  January  4,  1915,  in  which  there  was 
required,  with  certain  stated  modifications,  the  maintenance  of  the 
existing  relationships  between  groups  in  Official  Classification  and 
New  England  Territories,  including  the  Atlantic  Port  Differentials. 
These  differentials  and  other  relationships  were  fully  set  forth  in  the 
Commission 's  Order : — 

''The  Commission  having  under  consideration  its  report  and  order 
herein  of  July  29,  1914,  and  its  supplemental  report  herein  of  Dec. 
16,  1914; 

And  it  appearing,  That,  with  respect  to  interterritorial  rates,  points 
of  origin  on  the  one  hand  and  points  of  destination  on  the  other  in 
trunk  line.  New  England  and  Central  Freight  Association  territories, 
Illinois,  the  Virginias  and  eastern  Canada  are  arranged  in  geographi- 
cal groups  designated  by  rate  groups  or  percentage  numbers  generally 
indicating  their  relation  to  the  New  York-Chicago  rates,  or  to  the 
Chicago-Montreal  rates  as  to  certain  Canadian  points,  which  represent 
100  per  cent. ;  that  as  to  rates  between  points  within  trunk  line  and 
Central  Freight  Association  territories  and  the  Virginias,  and  as  be- 
tween trunk  line.  New  England  and  Central  Freight  Association  ter- 
ritories, and  between  these  territories  and  Illinois,  the  Virginias,  and 
parts  of  eastern  Canada,  certain  rate  relations  have  been  established 
by  grouping  points  of  origin  and  points  of  destination  and 
applying  a  common  rate  to  or  from  such  points;  that  the 
construction  of  rates  to  or  from  specific  points  is  based  upon  a  per- 
centage of  rates  to  or  from  other  points;  that  certain  rates  are  con- 
structed by  the  observance  of  specific  or  arbitrary  rates  or  differences 
to  or  from  adjacent  or  competitive  points,  and  that  rates  via  differ- 
ential routes  are  constructed  by  the  application  of  stated  differentials 
under  the  rates  of  standard  rail  routes ; 

And  it  appearing.  That  these  described  groupings  and  relations 
should,  in  the  interests  of  carriers  and  of  competition  between  shippers 
and  receivers,  be  maintained : 

463 


464  ATLANTIC  PORT  DIFFERENTIALS 

It  is  ordered,  That  in  establishing  the  increased  rates  approved  in 
said  reports,  respondents  may  preserve  these  existing  groupings  and 
relationships  as  specified  herein,  even  though  by  so  doing  some  rates 
are  increased  slightly  more  than  five  per  cent. 

It  is  further  ordered,  That  in  establishing  the  increased  rates  ap- 
proved in  the  said  reports  the  rates  from  Chicago  to  New  York  and 
Montreal,  and  from  New  York  to  Chicago,  may  be  increased  five  per 
cent.,  and  those  increased  rates  may  be  scaled  to  or  from  percentage 
points  or  groups  upon  the  established  percentage  groupings  and  per- 
centages; that  the  rates  via  ocean-and-rail  and  established  all-rail 
differential  lines  may  be  made  the  same  differentials  under  the  stand- 
ard all-rail  rates  as  now  exist,  and  that  the  established  groupings  of 
points  of  origin  or  of  points  of  destination  under  common  rates  may 
be  preserved,  even  though  so  doing  results  in  increasing  some  rates 
slightly  more  than  five  per  cent. 

A')2d  it  is  further  ordered,  That  the  percentage  relationship  of  rates, 
the  differential  and  arbitrary  adjustment  of  rates  hereby  authorized 
and  not  above  designated  shall  be  as  follows,  in  cents  per  100  pounds, 
except  where  otherwise  noted: 

I. — CLASS  RATES  FROM   TRUNK  LINE   AND   NEW  ENGLAND   TERRITORIES   TO 
CENTRAL  FREIGHT  ASSOCIATION  PERCENTAGE  POINTS, 

Classes    1     2     3     4     5     6 

From  Philadelphia,   Pa 6     6     2     2     2     2 

From  Baltimore,  Md 8     8     3     3     3     3 

lower  than  from  New  York. 

From  Albany,  XJtica  and  Fair  Haven,  N.  Y. — 

To  75  per  cent,  points  and  higher.  New  York  rates  less  20  per  cent, 
of  the  New  York  to  Chicago  rates. 

To  60  per  cent.,  67  per  cent.,  and  71  per  cent,  points,  Philadelphia  to 
60  per  cent,  points  rates  as  minima. 

To  70  per  cent,  points,  Philadelphia  to  70  per  cent,  points  rates  as 
minima. 

To  72  per  cent.,  73  per  cent.,  and  74  per  cent,  points.  New  York  rates 
less  20  per  cent,  of  the  New  York  to  Chicago  rates,  observing  71  per 
cent,  rates  as  minima. 

From  Tiochester, Syracuse — Geneva, Elmira, and  Moiint  Morris,  N.  Y. — 

To  72  per  cent,  points  and  higher,  70  per  cent,  of  the  New  York  rates. 

To  60  per  cent.,  67  per  cent.,  and  71  per  cent,  points,  arbitrary  rates. 

To  70  per  cent,  points,  same  rates  as  to  81  per  cent,  points. 
From  Boston,  Mass. — 

To  60  per  cent,  points,  New  York  rates  plus 

Classes    1       2       3       4       5       6 

Arbitraries    5       4       3       3       2i/^2 


APPENDIX  465 

To  67  per  cent,  and  70  per  cent,  points,  same  as  to  71  per  cent,  points. 
To  71  per  cent,  points  and  higher,  New  York  rates. 

From  New  Berlin,  -Y.  Y. — 

To  60  per  cent,  to  77  per  cent,  points.  New  York  rates  with  78  per 
cent.  (New  Berlin)  rates  as  maxima. 

To  78  per  cent,  points  and  higher,  New  York  rates  less 

Classes     1     2     3     4     5     6 

Arbitraries    6     5     4     3     2     2 

From  Ogdenshiirg,  N.  ¥. — 

To  60  per  cent,  to  77  per  cent,  points,  same  as  from  Boston,  but  not 
to  exceed  rates  from  Ogdensburg  to  78  per  cent,  points. 

Classes   1  2  3  4  5  6 

To  78  per  cent,  points   8  6  4  3  3  2 

To  79  per  cent,  points 8  6  5  4  4  2 

To  80  per  cent,  points  9  7  5  4  4  2 

To  81  per  cent,  points 10  8  6  4  4  2 

To  82  per  cent,  points  and  higher 10  8  6  4  4  3 

lower  than  from  Ncav  York. 

From  Scranton,  Pa. — 

To  all  percentage  points,  except  70  per  cent,  points,  80  per  cent,  of 
rates  from  New  York  to  same  destinations,  with  Philadelphia  to  60 
per  cent,  points  rates  as  minima. 

To  70  per  cent,  points  Williamsport  rate  plus 

Classes    1     2     3     4     5     6 

Arbitraries    2     2     1     1     1     1 

From  Williamsport,  Pa.,  and  Cumberland,  Md. — 

To  all  percentage  points  except  70  per  cent,  points,  77  per  cent,  of 
rates  from  New  York  to  same  destinations ;  Baltimore  to  60  per  cent, 
points  rates  minima  from  Williamsport. 

To  70  per  cent,  points,  same  as  from  Syracuse  to  70  per  cent,  points. 

From  Washington,  D.  C.  (via  southern  routes),  and  Lexington,  Va. — 
To  percentage  points,  Baltimore  rates  subject  to  Virginia  cities- 
Pittsburgh  rates  (Columbus  to  Baltimore  basis)  as  minima. 


From  Virginia  cities — 

Classes     1     2     3     4     5     6 

To  percentage  points,  Baltimore  rates  less 8     6     4     3     2     2 

subject  to  varying  minima  at  points  taking  less  than  95  per  cent. 

II, CLASS  RATES  FROM  TRUNK  LINE  TERRITORY  TO  CANADIAN  PERCENTAGE 

POINTS. 

From  Boston,  Mass. — 
To  76-C  to  100-C  points,  New  York  rates. 
30 


466  ATLANTIC  PORT  DIFFERENTIALS 

From  Albany,  N.  Y. — 

To  76-C  to  100-C  points,  New  York  rates  less  20  per  cent,  of  New- 
York  to  Chicago  rates. 

From  Ogdenshurg,  N.  Y. — 

To  76-D  and  78-D  points,  Detroit  rates  as  maxima. 

To  76-C  points,  same  as  to  78-C  points. 

Classes    1     2     3     4     5     6 

To  78-C  points 6     5     3     2     2     2 

less  than  New  York  rates. 

To  80-C  points 8     6     4     3     3     2 

less  than  New  York  rates,  but  not  less  than  to  78-C  points. 

To  82-C  to  100-C  points 8     6     4     3     3     2 

less  than  New  York  rates. 

From  Syracuse,  iV.  Y. — 

To  76-C  to  100-C  points,  70  per  cent,  of  New  York  rates. 

From  Philadelphia  and  Scranton,  Pa. — 

To  76-D  and  78-D  points,  Detroit  rates  as  maxima. 
To  76-C  to  100-C  points,  New  York  rates. 

From  Baltimore,  Md.,  and  Williamsport,  Pa. — 
To  76-D  and  78-D  points,  Detroit  rate  as  maxima. 
To  76-C  to  100-C  points.  New  York  rates. 

From  New  York  rate  territory — 

To  Montreal  rate  territory,  73  per  cent,  of  New  York  to  Chicago 
rates. 

To  Carleton  Place  rate  territory,  76  per  cent,  of  New  York  to  Chi- 
cago rates. 

To  Quebec  rate  territory.  78  per  cent,  of  New  York  to  Chicago  rates. 

From  Philadelphia  and  Baltimore  rate  territories — 

To  ^Montreal  rate  territorj^  same  as  from  New  York  rate  territory. 

To  Carleton  Place  rate  territory,  same  as  from  New  York  rate  ter- 
ritory. 

To  Quebec  rate  territory,  same  as  from  New  York  rate  territory. 

From  Albany  rate  territory — 

To  Montreal  rate  territory,  same  as  from  Albany  to  73  per  cent, 
points  in  Central  Freight  Association  territory. 

To  Carleton  Place  rate  territory,  same  as  from  Albany  to  76  per 
cent,  points  in  Central  Freight  Association  territory. 

To  Quebec  rate  territory,  same  as  from  Albany  to  78  per  cent,  points 
in  Central  Freight  Association  territory. 

Rate  to  Canadian  territory  east  of  Kingston,  Sharbot  Lake,  North 
Bay,  and  Depot  Harbor,  Ontario,  other  than  as  described  in  the  fore- 
going, arbitraries  above  base-point  rates. 


APPENDIX  467 

III. — COMMODITY    RATES    FROM    TRUNK    LINE    AND    NEW    ENGLAND    TERRI- 
TORIES TO  CENTRAL  FREIGHT  ASSOCIATION  PERCENTAGE  POINTS. 

From  Boston,  Mass. — 

To  Trunk  line  western  termini  and  60  per  cent,  points :  When  com- 
modity rates  from  New  York  to  the  western  termini  of  the  trunk  lines 
and  points  taking  60  per  cent,  of  New  York  to  Chicago  rates  are  the 
same  as  standard  class  rates,  rates  upon  like  articles  from  Boston, 
Mass.,  and  New  England  points  taking  Boston  rates  to  such  western 
termini  and  60  per  cent,  points  may  be  made  by  adding  to  the  com- 
modity rates  from  New  York  the  same  differences  which  exist  between 
such  class  rates  from  New  York  and  the  corresponding  class  rates 
from  Boston  to  same  destinations.  When  commodity  rates  from  New 
York  to  western  termini  of  the  trunk  lines  and  points  taking  60  per 
cent,  of  New  York  to  Chicago  rates  are  not  the  same  as  standard  class 
rates,  rates  upon  like  articles  from  Boston  and  New  England  points 
taking  Boston  rates  to  such  western  termini  and  60  per  cent,  points 
may  be  made  by  adding  to  the  commodity  rates  from  Nev/  York  the 
differences  which  exist  between  the  class  rates  next  higher  than  the 
commodity  rates  from  New  York  and  the  corresponding  class  rates 
from  Boston  to  same  destinations. 

To  67  per  cent,  to  71  per  cent,  points :  When  commodity  rates  are 
established  from  New  York  to  Chicago,  either  locally  or  as  a  basis  for 
other  western  points,  rates  upon  like  articles  from  Boston  and  New 
England  points  taking  Boston  rates  to  points  taking  higher  than  60 
per  cent.,  but  not  greater  than  71  per  cent,  of  New  York  to  Chicago 
rates,  may  be  made  the  same  as  rates  applying  from  New  York  to  71 
per  cent,  points. 

To  72  per  cent,  points  and  higher:  To  points  taking  higher  than  71 
per  cent,  of  New  York  to  Chicago  rates,  the  rates  from  Boston  and 
points  in  New  England  taking  Boston  rates  may  be  made  the  same 
as  from  New  York,  but  to  points  taking  higher  than  60  per  cent,  not 
less  than  to  60  per  cent,  points,  as  provided  in  the  foregoing. 

From  Albany,  N.  Y. — 

To  60  per  cent,  points  and  higher:  When  a  rate  per  100  pounds  or 
per  ton  is  established  upon  any  commodity  from  New  York  to  Chica'ro 
as  a  basing  rate  and  corresponding  rates  apply  from  interior  points, 
the  rate  from  Albany,  N.  Y.,  to  Chicago  and  other  points  taking  TOO 
per  cent,  of  New  York  to  Chicago  rates  may  be  80  per  cent,  of  the 
New  York  to  Chicago  rate.  Rates  to  points  taking  other  than  100  per 
cent,  of  New  York  to  Chicago  rates  may  be  scaled  on  the  established 
percentage  of  the  rate  from  Albany  to  Chicago. 


468  ATLANTIC  PORT  DIFFERENTIALS 

From  New  Berlin,  N.  Y. — 

To  60  per  cent,  to  77  per  cent,  points,  same  as  from  New  York,  with 
rates  from  New  Berlin  to  78  per  cent,  points  as  maxima. 

To  78  per  cent,  points  and  higher,  New  York  rates  less 

Classes*     1     2     3     4     5     6 

Differentials    6     5     4     3     2     2 

From  Ogdenshurg,  N.  Y. — 

To  60  per  cent,  points,  same  as  from  Boston  to  60  per  cent,  points. 

To  67  per  cent,  to  77  per  cent,  points,  same  as  from  Boston,  bnt  not 
to  exceed  rates  from  Ogdensbnro;  to  78  per  cent,  points. 

To  78  per  cent,  points  and  higher,  New  York  rates  less 

Classes*     1     2     3     4     5     6 

Differentials    10     8     6     4     4     3 

From.  Rochester-Syracuse,  N.  Y. — 

To  60  per  cent,  points  and  higher:  When  a  rate  per  100  pounds 
or  per  ton  is  established  upon  any  commodity  from  New  York  to 
Chicago  as  a  basing  rate  and  corresponding  rates  apply  from  interior 
points,  the  rates  from  Rochester-Syracuse,  N.  Y,,  to  Chicago  and  other 
points  taking  100  per  cent,  of  New  York  to  Chicago  rates  may  be  70 
per  cent,  of  the  New  York  to  Chicago  rate.  Rates  to  points  taking 
other  than  100  per  cent,  of  New  York  to  Chicago  rates  may  be  scaled 
on  the  established  percentage  basis  of  the  rate  from  Rochester-Syra- 
cuse to  Chicago. 

From  Philadelphia,  Pa. — 

To  60  per  cent,  points  and  higher.  New  York  rates  less 

Classes    1     2     3     4     5     6  or  lower 

Differentials     6     6     2     2     2  2 

From  Baltimore,  J\Id. — 

To  60  per  cent,  points  and  higher.  New  York  rates  less 

Classes    1     2     3     4     5     6  or  lower 

Differentials    8     8     3     3     3  3 

From  Scranton,  Pa. — 

To  60  per  cent,  points,  same  as  from  Philadelphia  to  60  per  cent, 
points. 

To  67  per  cent,  points  and  higher,  to  Chicago  and  other  100  per 
cent,  points,  80  per  cent,  of  New  York  to  Chicago  rate ;  to  points  t^kino; 
other  than  100  per  cent,  of  New  York  to  Chicago,  rates  scaled  on  es- 
tablished percentage  basis  of  rate  from  Scranton  to  Chicago.  (Phila- 
delphia to  60  per  cent,  rates  as  minima.) 


*In  connection  with  westbound  commodity  rates  upon  a  lower  basis 
than  sixth  class,  varying  differentials  are  applied,  dependent  u]inn  the 
standard  rate  basis  New  York  to  Chicago  governing  in  such  instances. 


APPENDIX  469 

From  WilUamsport,  Pa. — 

To  60  per  cent,  points,  same  as  from  Baltimore  to  60  per  cent,  points. 

To  67  per  cent,  points  and  hig-her,  to  C'liicag'o  and  other  100  p-r 
cent,  points,  77  per  cent,  of  New  York  to  Chicago  rate :  to  points  tak- 
ing other  than  100  per  cent,  of  New  York  to  Chicago,  rates  scaled  on 
established  percentage  basis  of  rate  from  Williamsport  to  Chicago. 
(Baltimore  to  60  per  cent,  rates  as  minima.) 

From  Cumberland,  Md. — 

To  60  per  cent,  points  and  higher,  to  Chicago  and  other  TOO  per 
cent,  points,  77  per  cent,  of  New  York  to  Chicago  rate ;  to  points  tak- 
ing other  than  100  per  cent,  of  New  York  to  Chicago  rates  scaled  on 
established  percentage  basis  of  rate  from  Cumberland  to  Chicago  (via 
Pennsylvania  Railroad,  Baltimore  to  60  per  cent,  rates  as  minima). 
From  Belington  and  Richivood,  W.  Va. — 

To  60  per  cent,  points  and  higher,  Cumberland  wmmodity  rates, 
subject  to  various  minima  and  exceptions. 
From  Lexington,  Va. — 

To  60  per  cent,  points  and  higher,  Baltimore  commodity  rates,  sub- 
ject to  Virginia  cities — Pittsburgh  rates  as  minima,  with  various  ex- 
ceptions. 
From  Virginia  cities — 

To  60  per  cent,  points  and  higher,  Baltimore  commodity  rates,  sub- 
ject to  various  minima  and  exceptions. 

IV. — CLASS  AND  COMMODITY  RATES  BETWEEN  POINTS  IN  TRUNK  LINE 

TERRITORY. 

Between  New  York,  Philadelphia  and  Baltimore  rate  points  and 
— 60  per  cent,  of  New  York-Chicago  rates. 

Between  Philadelphia  rate  points  and  Pittsburgh  and   Erie  rate 

points — 

Classes     1     2     3     4     5     6 

Arbitraries  of   6     6     2     2     2     2 

lower  than  rates  between  New  York  and  Pittsburgh  or  Erie. 

Between  Baltimore  rate  points  and  Pittsburgh  and  Erie  rate  points — 

Classes    1     2     3     4     5     6 

Arbitraries  of   8     8     3     3     3     3 

lower  than  rates  between  New  York  and  Pittsburgh  or  Erie. 

Between  New  York,  Philadelphia  and  Baltimore  rate  points  and 

Buffalo  rate  points — Philadelphia-Erie  rates. 

From  Albany  and  Utica  rate  points — 

To  Pittsburgh  and  Erie  rate  points — class  rates,  Philadelphia  to 
Pittsburgh  or  Erie  rates ;  connnodity  rates,  80  per  cent,  of  New  York 
to  Pittsburgh  or  Erie  rates. 


470  ATLANTIC  PORT  DIFFERENTIALS 

From  Pittsburgh  rate  points  — 

To  Albany  rate  points,  Pittsburgh  to  New  York  rates. 

From  Erie  rate  points — 

To  Albany  rate  points,  92  per  cent,  of  Erie  to  New  York  rates. 

From  Pittsburgh  rate  points — 

To  Utica  rate  points,  92  per  cent,  of  Pittsburgh  to  New  York  rates. 

From  Erie  rate  points — 

To  Utica  rate  points,  80  per  cent,  of  Erie  to  New  York  rates. 

From  Syracuse  and  Rochester  rate  points — 

To  Pittsburgh  and  Erie  rate  points — class  rates,  Syracuse  to  Cleve- 
land rates;  commodity  rates,  70  per  cent,  of  New  York  to  Pittsburgh 
or  Erie  rates. 

From  Pittsburgh  rate  points — 

To  Syracuse  rate  points,  84  per  cent,  of  Pittsburgh  to  New  York 
rates. 

To  Rochester  rate  points,  72  per  cent,  of  Pittsburgh  to  New  York 
rates. 

From  Erie  rate  points — 

To  Syracuse  rate  points,  75  per  cent,  of  Erie  to  New  York  rates. 
To  Rochester  rate  points,  62  per  cent,  of  Erie  to  New  York  rates. 

Between  Boston  rate  points  and  Pittsburgh-Erie  rate  points — 

Classes    1       2       3       4       5       6 

Arbitraries   of    5       4       3       3       2^2 

higher  than  New  York-Pittsburgh  or  Erie  rates. 

Between  Boston  rate  points  and  Buffalo  rate  points — 

Classes    1       2       3       4       5       6 

Arbitraries  of    5       5       2^  2i^  2i^  2 

higher  than  New  York-Buffalo  rates. 

Between  Pittsburgh  and  Virgiviia  cities — Columbus  to  Baltimore 
basis. 

Between  Rouses'  Point  rate  points  and  points  in  trunk  line  territory 

— same  as  between  Sherbrooke  rate  points  in  New  England  and  trunk 

line  territory  points. 

Between  Buffalo,  Dunhirh  and  interior  New  York  state  points  and —  " 

Classes    1  2     3  4  5  6 

Alexandria,  Va.,  and  Washington,  D.  C 10  8     6  6  5  5 

Quantico,  Va 13  10     8  6  5  5 

Virginia  cities   20  17  13  9  8  6 

over  Baltimore  rates. 


APPENDIX  471 

V. CLASS  AND  COMMODITY  RATES  FROM  TRUNK  LINE  TERRITORY  TO  POINTS 

IN    NEW    ENGLAND,    INCLUDING    EASTERN    CANADIAN    POINTS    ON 
THE    BOSTON   it    MAINE   AND    MAINE   CENTRAL    RAILROADS. 

From  Fittshurgh  and  Eric  rate  points — 

To  New  York  and  Pelliaiii  rate  points,  60  per  cent,  of  Chicago  to 
New  York  rates. 

To  Hartford,  Boston,  Portland  and  Brunswick  rate  territories 

Classes    1       2       :?       4       5       6 

Arbitraries  of   5       4       .3       3       2y,  2 

higher  than  Pittsburgh  or  Erie  to  New  York  rates. 

To  Sherbrooke  or  Woodsville  rate  points  in  the  United  States,  Cleve- 
land to  Boston  rates. 

To  Sherbrooke  rate  points  in  Canada,  Toledo  to  Boston  rates. 

From  Buffalo  rate  territory — 

To  New  York  and  Pel  ham  rate  points,  Buffalo  to  New  York  rates. 

To  Hartford,  Boston,  Portland  and  Brunswick  rate  points — 

Classes    1       2       3       4       5       6 

Arbitraries 5       5       2i^  2^  2t/^  2 

higher  than  Buffalo  to  New  York  rates. 

To  Woodsville  and  Sherbrooke  rate  points.  Pittsburgh  or  Erie  to 

.  Boston  rates. 

VI. — FROM  POINTS  IN  CENTRAL  FREIGHT  ASSOCIATION  TERRITORY,  ILLINOIS 
AND  MISSISSIPPI  RIVER  POINTS  CLASS  RATES. 

To  Boston,  Mass. 

Classes    1       2       3       4       5       6 

Cents   7       6       5       4       3       2 

over  New  York. 

To  Rockland,  Me.,  Boston  rates,  with  Cleveland  to  Boston  rates  as 
minima. 

To  Stanstead,  Quebec,  Boston  rates,  with  Toledo  to  Boston  rates  as 
minima. 

To  Baltimore,  Md. 

Classes   1       2       3       4       5       6 

Cents   3       3       3       3       3       3 

under  New  York. 

To  Philaxielphia,  Pa. 

Classes   1       2       3       4       5       6 

Cents   2       2       2       2       2       2 

under  New  York. 


472 


ATLANTIC  PORT  DIFFERENTIALS 


From  and  to  the  following  points  rates  will  be  the  stated  percentages 
of  New  York  rates,  except  as  shown : 


From  661^ 

From  72 

From   79 

pe 

-  cent,  to 

per  cent,  to 

per  cent,  to 

From 

71 

per   cent. 

78  per  cent. 

100  per  cent. 

points 

joints, 

points. 

points, 

over 

both 

both 

both 

100  per 

ir 

elusive. 

inclusive. 

inclusive. 

cent. 

Per  cent. 

Per  cent. 

Per  cent. 

Per  cent. 

Albany,  N.  Y 

96 

9(i 

96 

96 

Mount  Morris,  N.  Y. 

*63 

*6S 

74 

76 

Rochester,  N.  Y 

■  • 

Cumberland,  Md.f    . 

•1 

74 

76 

80 

84 

Syracuse,  N.  Y 

•  -J 

Utica,  N.  Y 

83 

87 

90 

91 

To  Emporium,  Pa.,  same  as  to  Rochester,  N.  Y. 
*From  66>2  per  cent,  to  78  per  cent,  points,  both  inclusive,  to  Mount 
]\Iorris  and   Rochester,  N.  Y.,  and  points   taking  ]\Iount  ]\Iorris   or 

Rochester  rates 

Classes    1       2       3       4       5       6 

Cents 3       3       2       2       1       1 

over  Buffalo. 

f  Johnstown,  Pa.,  rates  as  minima. 


VII. — LIVE  STOCK  AND  DRESSED  MEAT  RATES. 

To  Boston,  Mass.,  same  as  to  New'  York. 

To  Baltimore,  ]\Id.,  3  cents  less  than  to  New  York. 

To  Philadelphia,  Pa.,  2  cents  less  than  to  New  York. 

To  Albany,  Cumberland,  Mount  Morris,  Rochester,  S.yracuse,  Utica 
and  points  taking  same  rates,  percentages  for  class  rates  will  apply, 
except : 

From  Q&lA  per  cent,  to  78  per  cent,  points,  both  inclusive,  in  car- 
loads, to  j\Iount  IMorris  and  Rochester,  and  points  taking  same  rates, 
calves,  cattle,  hogs  and  sheep,  1  cent;  horses,  3  cents,  and  dressed 
meats,  2  cents  over  Buffalo. 

From  Indiana,  Illinois  and  Kentucky  points  taking  higher  than  100 
per  cent,  of  Chicago  to  New  York  rates  to  Baltimore,  Md. ;  Boston, 
Mass.,  New^  York,  N.  Y.,  and  Philadelphia,  Pa.,  on  cattle,  horses,  mules 
and  sheep,  also  dressed  beef,  dressed  hogs  and  dressed  sheep,  carloads : 


From  points  over  100  per  cent,  to  and  including  108  per  cent. 
From  points  over  108  per  cent,  to  and  including  110  per  cent. 
From  points  over  110  per  cent,  to  and  including  112  per  cent. 
From  points  over  112  per  cent,  to  and  including  117  per  cent. 


Over 
Chicago. 
2 
3 

4 


On  cattle,  horses,  mules  and  sheep,  also  on  dressed  beef,  dressed 
hogs  and  dressed  sheep,  carloads,  to  interior  eastern  points,  established 
percentages  of  the  New  York  rates. 


APPENDIX  473 

On  live  stock,  carloads,  to  Virginia  points:  (a)  From  60  per  cent,  to 
and  including  76  per  cent,  points,  76  per  cent,  of  Chicago-New  York 
rates,  less  Baltimore  differential  of  3  cents,  (b)  From  77  per  cent,  to 
87  per  cent,  points,  inclusive,  87  per  cent,  of  Chicago-New  York  rates, 
less  Baltimore  differential  of  3  cents. 

From  88  per  cent,  points  and  higher,  established  percentage  of  Chi- 
cago to  New  York  rates,  less  3  cents,  except  that  on  horses  and  mules 
New  York  rates  apply. 

From  Illinois,  Indiana  and  Kentucky  points  taking  higher  than  100 
per  cent. : 

On  calves,  cattle,  lambs,  and  sheep,  carloads : 

Over  the 
Chicago- 
Virginia 
points 
rates. 
Cents. 
From  points  over  100  per  cent,  to  and  ineliuling  lOS  per  cent.  2 

From  points  over  108  per  cent,  to  and  including  110  per  cent.  3 

From  points  over  110  per  cent,  to  and  including  112  per  cent.  4 

From  points  over  112  per  cent,  to  and  including  117  per  cent.  5 

On  horses  and  mules,  carloads,  from  points  taking  higlier  than  100 
per  cent.,  New  York  rates  as  minima. 

VIII. — COMMODITY  RATES. 

To  Boston,  Mass.,  class  differentials  over  New  York  rates  when  the 
rate  of  New  York  is  same  as  the  standard  class  rate.  If  commodity 
rate  to  New  York  is  not  same  as  standard  class  rate,  commodity  rate 
to  Boston  will  be  the  differential  for  the  next  higher  class  than  that 
indicated  by  the  New  York  rate. 

To  Rockland,  Me.,  and  Stanstead,  Quebec,  same  rules  as  provided 
above  for  class  rates. 

To  Baltimore,  Md.,  3  cents,  and  to  Philadelphia,  Pa.,  2  cents  lower 
than  to  New  York. 

To  Albany,  Cumberland,  Mount  Morris,  Rochester,  Syracuse,  Utica 
and  interior  points  taking  same  rates,  class  rate  percentages  of  the 
New  York  rates. 

From  66>2  per  cent,  to  78  per  cent,  points,  both  inclusive,  to  Roch- 
ester and  Mount  Morris,  N.  Y.,  and  points  taking  Rochester  rates, 
Buffalo  rates  plus  arbitrary  for  class  that  is  most  nearly  approximated 
by  the  New  York  commodity  rate,  but  not  to  exceed  rates  from  or  to 
points  beyond. 

Minimum  rates  to  Rochester,  Syracuse  and  same  rate  points  may  be : 

(a)  Basis  less  than  20  cents,  Chicago  to  New  York,  from  66>4  per 
cent,  points  or  higher  Baltimore  rates.     (See  Note  1.) 

(b)  Basis  of  20  cents  or  higher  Chicago  to  New  York,  from  points 


474  ATLANTIC  PORT  DIFFERENTIALS 

taking  66>4  per  cent,  or  higher,  Baltimore  rates  on  basis  19>4  cents 
Chicago  to  New  York.  (See  Note  1.) 

Note  1. — These  rules  will  not  apply  on  blocks,  asphalt  paving,  fur- 
nace, or  tank ;  brick,  building,  fire,  furnace,  hollow,  paving,  pressed, 
salt-glazed,  sand  lime,  or  tank;  clay,  all  kinds,  including  fire;  con- 
duits, brick  or  clay ;  curbing,  vitrified ;  fireproofing,  clay ;  flue  lining ; 
guards,  cattle,  clay;  heads,  stopper,  clay;  kaolin;  shale,  slabs,  tile; 
sleeves,  clay ;   tuyeres,  clay. 

IX. — COTTON,  COTTON  LINTERS  AND  BEGINS. 

To  Boston,  Mass.,  5  cents  higher  than  to  New  York. 
To  Baltimore,  Md.,  3  cents  less  than  to  New  York. 
To  Philadelphia,  Pa.,  2  cents  less  than  to  New  York. 
To  Albany,  Rochester,  Syracuse  and  Utica,  5  cents  less  than  to 
New  York. 

X. — GRAIN   AND   GRAIN  PRODUCTS. 
DOMESTIC. 

To  Baltimore,  Md.,  3  cents  under  New  York. 

To  Boston,  Mass.,  2  cents  over  New  York. 

To  Newport  News  and  Norfolk,  Va.,  same  as  to  Baltimore,  except 
as  otherwise  provided  herein  for  rates  to  Virginia  cities. 

To  Philadelphia,  Pa.,  2  cents  under  New  York. 

To  Rockland,  Me.,  and  Stanstead,  Quebec,  same  rules  as  apply  to 
class  rate  traffic. 

The  following  percentages  of  the  rate  to  New  York  will  apph'  from 

and  to  the  points  named : 

To  To 

To             Cumber-  Eoches-  To                 To 

Alb'any,           land,  ter,  Syracuse,  Utica, 

From—                  N.  Y.             Md.  N.  Y.*  N.  Y.*  N.  Y. 

Pet.  Pet.  Pet.  Pet. 

GrouTl  ■.■.■.■.■;.■.■.■.■.■.}  ''  **  ^4  80  90 

Group  2   96  * '  74  80  90 

Groups   96  **  74  80  90 

Group  4  96  *""  74  80  90 

Group  4-A  96  **  76  84  91 

Group  5   96  **  74  80  90 

Group  6 96  **  74  80  90 

Group   7    96  **  74  80  90 

Group  8   96  **  74  80  90 

Group  9   96  *^  68  76  87 

Group  9-A    96  **  74  80  90 

Group  9-B  96  **  74  80  90 

Group  10  96  **  68  76  87 

Group  11   96  **  68  76  87 

Group  12   96  **  63  74  83 

Group  13   96  **  74  80  90 

Group  14   96  **  74  80  90 

Group  15   96  **  74  80  91 

*Baltimore  rates  as  minima  to  Rochester  and  Syracuse. 
**Deduct  one-half  cent  from  the  Baltimore  rates,  observing  Johns- 
town rates  as  minima. 


APPENDIX  475 

GRAIN  FOR  EXPORT. 

To  Baltimore,  V/^  cents  under  New  York. 

To  Boston,  same  as  New  York. 

To  Philadelphia,  1  cent  under  New  York. 

GRAIN  PRODUCTS  (EXCEPT  FLOUR )  FOR  EXPORT. 

To  Baltimore,  3  cents  under  New  York. 

To  Boston,  same  as  New  York. 

To  Philadelphia,  2  cents  under  New  York. 

FLOUR  FOR   EXPORT. 

To  Baltimore,  same  as  export ' '  grain  product ' '  rate. 

To  Boston,  same  as  New  York. 

To  New  York,  2  cents  over  Baltimore. 

To  Philadelphia.  1  cent  over  Baltimore. 

XI. — CLASS,    COMMODITY,    DRESSED    MEATS   AND   LIVE    STOCK. 

From  points  named  below  in  the  following  groups : 

Group         Group         Group         Group 
1  2  4  5 

Percentage       of       Chicago       to       New 
To —  York  rates  (see  Note  2). 

New  York,  N.  Y 60  60  60  60 

Percentage  of  New  York  rates. 

Albany,  N.  Y So  92  92  100 

Cumberland,    M(i.*f    

Emporium,  Pa.   (see  Note  1) 60  62  62  72 

Syracuse,  N.  Y 75  75  78  84 

Utica,  N.  Y 80  80  85  92 

Mt.  Morris,  N.  Y.  (see  Note  1) 55  62  62  72 

Rochester,  N.  Y.  (see  Note  1) 55  62  62  72 

Hagerstown,  Md.J.  .Baltimore,  Md.,  rates  with  Norfolk,  Va.,  rates  as  minima. 

Rockland,  Me Cleveland,  Ohio,  to  Boston,  Mass.,  rates  as  minima. 

Standstead,  Que Toledo,  OhiOj  to  Boston,  Mass.,  rates  as  minima. 

*Eates  from  &Qy2  per  cent,  points  as  maxima. 

t Grain,  grain  products,  and  bj^-products  of  grain,  ^^  cent  less  than 
Baltimore ;   Johnstown  rates  as  minima. 

JVia  Norfolk  &  Western  Ry.  only. 

From  groups  1,  2,  4  and  5  to  Boston,  Mass.,  class  and  commodity 

rates  will  be — 

Classes   1       2       3       4       5       6 

Cents    5       4       3       3       2i^2 

higher  than  to  New  York.    On  dressed  meats  and  live  stock,  carloads, 

from  all  groups  to  Boston,  same  as  to  NeAv  York, 

From  points  named  in  groups  1,  2,  4  and  5  to  Philadelphia,  class 

and  commodity  rates  will  be — 

Classes    1       2       3       4       5       6 

Cents    6       6       2       2       2       2 


476  ATLANTIC  PORT  DIFFERENTIALS 

less  than  to  New  York.     On  dressed  meats  and  live  stock,  carloads, 
from  all  groups  to  Philadelphia,  2  cents  less  than  to  New  York. 

From  points  named  in  group  1  to  Baltimore,  class' and  commodity 
rates  will  be — 

Classes   1       2       3       4       5       6 

Cents    6       6       2       2       2       2 

less  than  to  New  York ;  from  groups  2,  4,  and  5  to  Baltimore,  will  be — 

Classes    1       2       3       4       5       6 

Cents    8       8       3       3       3       3 

less  than  to  New  York.     On  dressed  meats  and  live  stock,  carloads, 

from  all  groups  to  Baltimore,  3  cents  less  than  to  New  York. 

Station.  Group  No.  Station.  Group  No. 

Brockton,  N.  Y 1  .Taniestown,   N.   Y 1 

Butler,   Pa 5  Mayville,  N.  Y 1 

Corrv,   Pa 2  Meadville,  Pa 4 

Dayton,   N.   Y 1  Oil  City,  Pa 4 

Dunkirk,  N.  Y 1  Titusville,   Pa 4 

Erie,   Pa 2  Union  City,  Pa 2 

Falconer  Junction,  N.  Y 1  Warren,  Pa 2 

Franklin,   Pa 4  Westfield,  N.  Y 1 

Irvineton,  N.  Y 2 

Note  1. — Rochester,  Emporium,  Mount  ]\Iorris  and  points  taking 
same  rates: 

Classes    1       2       3       4       .5       6 

Cents    4       3       2       2       1       1 

over  BuflPalo,  but  not  higher  than  from  or  to  points  beyond. 

Note  2. — Except  on  iron  and  steel  articles,  grain  and  grain  prod- 
ucts, rates  from  Mahoning  and  Shenango  Valleys  as  maxima  from  60 
per  cent,  points. 

TO   VIRGINIA   CITIES. 

Baltimore  rates  will  be  minima  to  Virginia  cities  proper,  except  (a) 
from  points  taking  less  than  77  per  cent,  of  Chicago  to  New  York  rates, 
and  (b)  from  points  taking  higher  than  77  per  cent,  of  Chicago  to 
New  York  rates,  located  in  territory  on  and  east  of  Norfolk  &  Western 
Railway,  Columbus  to  Portsmouth,  Ohio,  and  south  of  Pittsburgh,  Cin- 
cinnati, Chicago  &  St.  Louis  Railway,  Columbus  to  Steubenville,  Ohio, 
inclusive,  to  Virginia  cities  proper,  Columbus,  Ohio,  to  Baltimore 
proper  rates  as  minima. 

TO  VIRGINIAN   RAILWAY  STATIONS. 

To  first  station  south  of  Deepwater,  W.  Va.,  to  and  including  Lester, 

W.  Va. :   From  points  on  and  west  of  Cleveland-Marietta-Belpre  line 

described  in  Note  1,  Norfolk  rates,  plus 

Classes   1       2       3       4       5       6 

Cents    6       5       4       3       2       2 


APPENDIX  477 

From  points  east  of  Cleveland-Marietta-Belpre  line  described  in  Note 
1,  same  as  from  Baltimore. 
To  points  south  and  east  of  Lester,  W.  Va.,  to  but  not  including 
Salem,  Va. :   From  points  on  and  west  of  the  Cleveland-IMarietta-Bel- 
pre  line  described  in  Note  1,  Norfolk  rates  plus 

Classes    1       2       3       4       5       6 

Cents    12     10       8       7       6       5 

From  points  east  of  Cleveland-Marietta-Belpre  line  described  in  Note 
1,  same  as  from  Baltimore. 

To  Salem,  Va. :  From  points  on  and  west  of  Cleveland-Marietta- 
Belpre  line  described  in  Note  1,  Norfolk  rates.  From  points  east  o£ 
Cleveland-INIarietta-Belpre  line  described  in  Note  1,  Baltimore  to 
Salem,  Va.,  rates. 

To  Roanoke,  Va. :  From  Central  Freight  Association  and  Illinois 
points,  Norfolk  rates. 

To  points  east  of  Roanoke,  Va.,  to  and  including  Altnvista,  Va. : 
From  points  on  and  west  of  Cleveland-]Marietta-Belpre  line  described 
in  Note  1,  Norfolk  rates.  From  points  east  of  Cleveland-]\Iarietta- 
Belpre  line  described  in  Note  1,  rate  basis  as  per  Note  2. 

To  points  east  of  Altavista,  Va.,  through,  but  not  including  Suffolk, 
Va.,  to,  but  not  including  Norfolk,  Va. :  From  points  on  and  west  of 
Cleveland-Marietta-Belpre  line  described  in  Note  1,  Norfolk  rates  plus 

Classes    1       2       3       4       5       6 

Cents    12     10       8       7       6       5 

From  points  east  of  Cleveland-Marietta-Belpre  line  described  in  Note 
1,  rate  basis  as  per  Note  2. 

To  Alberta,  Brookneal,  Jarratt  and  jNIeherrin,  Va.,  on  shipments 
destined  beyond:  From  points  on  and  west  of  Cleveland-Marietta- 
Belpre  line  described  in  Note  1,  Norfolk  rates. 

To  Norfolk,  Sewells  Point  and  Suffolk,  Va. :  From  Central  Freight 
Association  and  Illinois  points,  Norfolk  rates. 

Note  1. — Description  of  Cleveland-Marietta-Belpre  line:  Begin- 
ning at  and  including  Cleveland,  Ohio ;  thence  via  and  including 
points  on  the  lines  of  the  Pennsylvania  Company  to  and  including 
Hudson,  Ohio;  thence  via  and  including  points  on  the  Cleveland, 
Akron  &  Columbus  Railway,  to  and  including  Akron,  Ohio;  thence 
via  and  including  points  on  the  Baltimore  &  Ohio  Railroad,  to  and  in- 
cluding Canton,  Ohio;  thence  via  and  including  points  on  the  Balti- 
more and  Ohio  Railroad  to  and  including  Valley  Junction,  Ohio; 
thence  via  and  including  points  on  the  lines  of  the  Pennsylvania  Com- 
pany, to  and  including  Canal  Dover,  Ohio:  thence  via  and 
including  points  on  the  Baltimore  &  Ohio  Railroad,  to  Uhrichs- 
ville,    Ohio;    thence   via    and   including   points   on    the   Pittsburgh, 


478  ATLANTIC  PORT  DIFFERENTIALS 

Cincinnati,  Chicago  &  St.  Louis  Railway,  to  and  including  New  Com- 
erstown,  Ohio;  thence  via  and  including  points  on  the  lines  of  the 
Pennsylvania  Company,  to  and  including  Marietta,  Ohio ;  thence  via 
and  including  points  on  the  Baltimore  &  Ohio  Southwestern  Railroad, 
to  and  including  Belpre,  Ohio. 

Note  2. — Add  following  arbitraries,  governed  by  Southern  Classi- 
fication, to  Norfolk,  Va.,  rates: 

Classes    ...12       3       45       6ABCDEFH 
Cents    ....20     16     13     11       9       8       7       8       7       7       9     14     11 

Arbitraries  for  commodities  announced  in  Virginian  Railway  Freight 
Tariff  I.  C.  C.  No.  760  may  be  used  in  arriving  at  through  joint  rates 
from  points  east  of  Cleveland-Marietta-Belpre  line  described  in  Note  1. 

TO  BELINGTON,   ELKINS,   ETC. 

Class  and  commodity  rates  to  Belington  and  Elkins,  W.  Va.,  and 
points  taken  same  rates,  same  as  to  Cumberland,  Md.,  subject  to  exist- 
ing rule  as  to  minimum  rates.  This  basis  applies  from  points  west  of 
Ohio  River  and  Ohio-Pennsylvania  state  line  taking  rates  higher  than 
from  Pittsburgh,  Allegheny,  Pittsburgh,  North  Side,  Bellaire,  Wheel- 
ing or  Parkersburg  proper,  also  from  points  east  of  Ohio-Pennsylvania 
state  line  located  on  and  west  of  Bessemer  &  Lake  Erie  Railroad,  sub- 
ject to  minimum  basis  of  17^2  cents,  Chicago  to  New  York. 

XII. — IRON  AND  STEEL  ARTICLES,  BILLETS,  PIG  IRON  AND  ARTICLES  TAKING 

SAME  RATES. 

FROM    CLEVELAND    GROUP. 

Iron   and  steel   articles  classified  fourth,  „.,, 

fifth,   and  sixth  class.  Billets,   pig  iron,  etc.,   per  ton. 

Albany,  N.  Y 2  cents  higher  than  Pittsburgh  30  cents  higher  than  Pittsburgh. 

Baltimore,  Md 3  cents  higher  than  Pittsburgh  RO  cents  higher  than  Pittsburgh. 

Binghamton,  N.  Y.   .  Same   as    Pittsburgh    Same   as  Pittsburgh. 

Boston,   Mass 3  cents  higher  than   Pittsburgh  fio  cents  higher  than  Pittsburgh. 

Burlington,    Vt 3  cents  higher  than  Pittsburgh  fin  cents  higher  than  Pittsburgh. 

Corning,  N.  Y.  , Same  as  Pittsburgh   Same   as   Pittsburgh. 

Elmira,   N.   Y Same  as  Pittsburgh   Same   as   Pittsburgh. 

Geneva,   N.   Y Same  as  Pittsburgh   Same   as  Pittsburgh. 

Hornellsville,  N.   Y.  .  Same  as  Pittsburgh   Same   as  Pittsburgh. 

Ithaca,  N.  Y Same  as  Pittsburgh   Same   as   Pittsburgh. 

Lexington,    Va Same  as  Pittsburgh   2n  cents  higher  than  Pittsburgh. 

Lynchburg,  Va Same  as  Pittsburgh   20  cents  higher  than  Pittsburgh. 

Mount  Morris,   N.   Y.  Same  as  Pittsburgh   Same  as  Pittsburgh. 

Newport  News,  Va.   .  Same  as  to  Lexington,  Va Same   as   to   Lexington,  Va. 

New   York,    N.    Y.    . .  3  cents  higher  than  Pittsburgh  60  cents  higher  than  Pittsburgh. 

Norfolk,   Va Same  as  to  Lexington,  Va Same  as  to   Lexington,  Va. 

Old     Point    Comfort, 

Va Same  as  to  Lexington,  Va Same  as  to   Lexington,  Va. 

Owego,  N.  Y Same  as  Pittsburgh   Same   as   Pittsburgh. 

Philadelphia,    Pa.    . .  3  cents  higher  than  Pittsburgh  60  cents  higher  than  Pittsburgh. 

Portsmouth.   Va Same  as  to  Lexington,  Va Same  as  to  Lexington,   Va. 

Punxsutawney,  Pa.   .  Same  as  to  Rochester,  N.  Y.   . .  Same  as  to  Rochester,  N.   Y. 

Richmond,  Va Same  as  to  Lexington,  Va Same  as  to  Lexington,  Va. 

Richfield  Springs,  N. 

Y 2  cents  higher  than  Pittsburgh  30  cents  higher  than  Pittsburgh. 

Rochester,   N.   Y.    ...  Same  as  Pittsburgh   Same  as  Pittsburgh. 

Rockland^,  Me Same  as  to  Boston   Same   as   to    Boston. 

Stanstead,   Quebec   ..  Same  as  from  Toledo  to  Boston  Same  as  from  Toledo  to  Boston. 

Syracuse,  N.  Y Same  as  Pittsburgh   Same  as  Pittsburgh. 

Utica,  N.  Y Same  as  Pittsburgh   Same  as  Pittsburgh. 

Waverly,  N.  Y Same  as  Pittsburgh   Same  as  Pittsburgh. 

Wayland,  N.  Y Same  as  Pittsburgh   Same  as  Pittsburgh. 


APPENDIX  47!J 

FROM  YOUNGSTOWN  GROUP. 

Albany,  N.  Y 1    cent   higher   than    Pittsburgh  20  cents  higher  than  Pittsburgh 

Baltimore,    Md 2  cents  higher  than  Pittsburgh  -iCi  cents  higher  than  Pittsburgh 

Binghamton,  N.  Y.   .  Same  as  Pittsburgh    Same   as    Pittsburgh. 

Boston,   Mass 2  cents  higher  than   Pittsburgh  4n  cents  higher  than  Pittsburgh 

Burlington,    Vt 2  cents  higher  than   Pittsburgh  40  cents  higher  than  Pittsburgh 

Corning,  N.  Y Same  as  Pittsburgh   Same  as   Pittsburgh. 

Elmira,   N.    Y Same  as  Pittsburgh   Same   as    Pittsburgh. 

Geneva,   N.   Y Same  as  Pittsburgh   Same  as   Pittsburgh. 

Hornellsville,  N.   Y.  .  i^  cent  less  than   Pittsburgh   ..10    cents    less    than    Pittsburgh. 

Ithaca,  N.  Y Same  as  Pittsburgh   Same   as  Pittsburgh. 

Lexington,    Va Same  as  Pittsburgh   20  cents  higher  than  Pittsburgh 

Lynchburg,  Va Same  as  Pittsburgh   20  cents  higher  than  Pittsburgh. 

Mount  Morris,   N.   Y.  I/2   cent   less   than    Pittsburgh    .  10   cents   less   than    Pittsburgh. 

Newport  News,  Va.   .  Same  as  to  Lexington,  Va Same  as  to  Lexington,  Va. 

New   York.    N.    Y.    . .  2  cents  higher  than   Pittsburgh  40  cents  higher  than  Pittsburgh. 

Norfolk,   Va Same  as  to  Lexington,  Va Same  as  to  Lexington,  Va 

Old    Point    Comfort, 
Va Same  as  to  Lexington,  Va Same  as  to  Lexington,  Va. 

Owego,  N.  Y Same   as    Pittsburgh    Same    as    Pittsburgh. 

Philadelphia,    Pa.    ..2  cents  higher  than  Pittsburgh  40  cents  higher  than    Pittsburgh. 

Portsmouth.   Va Same  as  to  Lexington,  Va Same  as  to  Lexington,  Va. 

Punxsutawney,  Pa.    .  Same  as  to  Rochester,  N.  Y.   . .  Same   as    to   Rochester,    X.    Y. 

Richmond,  Va Same  as  to  Lexington,  Va Same  as  to  Lexington,  Va 

Richfield  Springs,  N. 
Y 1  cent  higher  than  Pittsburgh  .  20  cents  higher  than  Pittsburgh 

Rochester,    N.   Y.    ...  ^4  cent  less  than  Pittsburgh  ...  10  cents  less  than  Pittsburgh 

Rockland,  Me Same  as  from  Cleveland  to  Bos- 
ton   •,• Same  as  from  Cleveland  to  Boston. 

Stanstead,   Quebec    ..  Same  as  from  Toledo  to  Boston  Same  as  from  Toledo  to  Boston. 

Syracuse,  N.  Y fame  as   from   Pittsburgh    Same  as   from  Pittsburgh. 

Utica,  N.  Y 4th  and  .5th  class  same  as  Pitts- 
burgh :    6th  class,  i^  cent  less  10   cents  less  than   Pittsburgh, 
than    Pittsburgh     10  cents   less   than   Pittsburgh. 

Waverly,  N.  Y Same  as  Pittsburgh   Same   as    Pittsburgh. 

Wayland,  N.  Y V2  cent  less  than  Pittsburgh  ...  10  cents  less  than  Pittsburgh. 

FROM    MARIETTA    AND    ZANESVILLE    GROUPS. 

Albany,  N.  Y 3  cents  higher  than   Pittsburgh  60  cents  higher  than  Pittsburgh. 

Baltimore,  Md 'iy,  cents  higher  than  Pitts- 
burgh     70  cents  higher  than  Pittsburgh. 

Boston,  Mass 3I/2  cents  higher  than  Pitts- 
burgh     70  cents  higher  than  Pittsburgh. 

New  York,  N.  Y.  ...  3i,4  cents  higher  than  Pitts- 
burgh     70  cents  higher  than  Pittsburgh. 

Philadelphia,  Pa.  ...  31/2  cents  higher  than  Pitts- 
burgh      70  cents  higher  than  Pittsburgh. 

Rochester,  N.  Y 2  cents  higher  than  Pittsburgh*  40  cents  higher  than  Pittsburgh. 

Syracuse,  N.  Y 1   cent  higher  than   Pittsburgh.  20  cents  higher  than  Pittsburgh. 

Utica.  N.  Y 1   cent  higher  than   Pittsburgh.  20  cents  higher  than  Pittsburgh. 

Virginia  cities  Columbus,    Ohio,    to    Baltimore 

rates     20  cents  higher  than  Pittsburgh. 

♦Fourth  class,  3  cents  higher  than  Pittsburgh.  Will  also  apply  on  less-than-carload 
shipments  of  articles  specified  in  special  iron  and  steel  list. 

From  Marietta  and  Zanesville  groups,  the  rates  subject  to  the  basis 
of  74  per  cent,  of  rates  current  from  Chicago  to  New  York  City  apply 
as  maxima. 

On  iron  and  steel  articles  classified  fourth,  fifth  and  sixth  class,  re- 
spectively, billets,  pig  iron  and  articles  groups  therewith : 

From  Wheeling,  Va.,  group  to  eastern  base  points  named  above, 
same  as  from  Pittsburgh. 

From  Conneaut  Lake,  Pa.;  Dunkirk,  N.  Y. ;  Erie,  Exposition  Park, 
Franklin,  Lj-nces  Junction.  ^Meadville.  Oil  City,  Watsons  Run,  West 
Union  and  West  Vernon,  Pa.,  Pitt.sburgh  rates,  except  that  rates  from 
Youngstown,  Ohio,  will  be  maxima. 


480 


ATLANTIC  PORT  DIFFERENTIALS 


On  iron  and  steel  billets,  pig  iron  and  articles  taking  the  same  rates 

to  Virginia  cities  from  Ashland,  Ky.,  and  Tronton,  Ohio,  same  as  from 

Pittsburgh ;  from  Columbus,  Ohio,  20  cents  per  ton  over  Pittsburgh. 

ON  BILLETS,  PIG  IBON  AND  ARTICLES  TAKING  SAME  RATE. 

From  To —  Rate  bases. 

Akron,  O 

Alliance,  O 

Ashtabula,  O 

Barberton,   O 

Cambridge,  O 

Canal  Dover,  0 

Canton,  O 

Cleveland,  0 

Coshocton,  O 

Dunkirk,  N.  Y 

Elvria,    O 

Erie,  Pa 

Girard,  Pa 

Hudson,    0 

Kent,  O 

Lorain,   O 

Mahoning   and    Shenango 

Valleys    

Massillon,  O 

Medina,  O 

Mineral  Point,  0 

Minerva,  O 

New  Conierstown,  O 

New  Philadelphia,  O.  .  . . 

Oneida,   O 

Orrville,    O 

Painesville,  O 

Ravenna,  O 

Zoar,  O 

Bridgeport,  0 

Brilliant,  O 

Irondale,  O 

Martins  Ferry,  0 

Mingo  .Junction,  O 

Smith  Ferry,  O 

Steubenville,  O 

Wellsville,  0 " 


Harrisburg,   Pa.    .  . . 

Milton,   Pa 

-Northumberland,  Pa. 

Steelton,  Pa 

Sunbury,  Pa 

Williamsport,  Pa..  .  . 


j-Bal  timers. 


Harrisburg,  Pa 

I  Milton,   Pa 

I  Northumberland,  Pa. 
I  Steelton,  Pa 

Sunbury,  Pa 

Williamsport,   Pa.    .  . 


.1  Baltimore,  less  10 
,  I  cents  per  ton  (gross 
.  j  or  net,  as  case  may 
.  (be),  Wheeling,  W. 
.  I  Va.,  to  Syracuse,  N. 
.J  Y.,  rates  as  maxima. 


J 

TO  CUMBERLAND,  MD. 

On  iron  and  steel  billets,  pig  iron,  tin  ashes  and  articles  taking  same 
rates,  from  points  west  of  a  line  drawn  from  Sandusky,  Ohio,  through 
Kimball,  Monroeville,  Chicago  Junction,  Plymouth,  Shelby,  IMansfield, 
i\Iount  Vernon,  Newark  and  New  Lexington,  Ohio,  through  Coming 
and  Athens,  Ohio,  to  the  Ohio  River  at  Pomeroy,  Ohio,  to  Cumberland, 
Md.,  60  cents  per  ton,  net  or  gross,  higher  than  to  Pittsburgh,  Pa. 

IRON  AND  STEEL   BILLETS,   PIG   IRON,   ETC. 

Except  from  Cleveland,  the  ]\Iahoning  and  Shenango  Valleys  and 
other  points  basing  on  Pittsburgh,  Pa.,  rates  on  pig  iron,  iron  and 


APPENDIX 


481 


steel  billets,  and  articles  taking  same  rates  may  be  computed  as  fol- 
lows: 

When  a  basing  rate  per  gross  ton  is  established  from  Chicago,  111., 
to  New  York,  obtain  rates  from  Chicago  by  ascertaining  the  rate  in 
cents  per  100  pounds  from  Chicago  to  New  York,  using  weight  of 
2,000  pounds  per  ton  and  retaining  the  actual  fractions,  after  which 
apply  regular  percentage  basis. 

Xni. — TO    CANADIAN   POINTS. 

To  Canadian  points  mentioned  below  and  points  taking  the  same 
rates : 

From  points  east  of  Cincinnati  taking  Pittsburgh  rates  via  Detroit 
to  stations  east  of  Toronto,  through  rates  from  Cincinnati  will  be 
minima. 

From  points  taking  less  than  78  per  cent,  of  Chicago  to  New  York 
rates,  78  per  cent,  point  rates  w^ill  be  minima. 

From  points  taking  percentages  of  Chicago  to  New  York  class  rates, 
the  following  percentages  of  Montreal  standard  rates,  subject  to  ]\Ion- 
treal  rates  as  maxima  to  stations  in  direct  line : 


Classes  and  commoclities. 


To— 

Agincourt,  Ont 1 

Myrtle,  Ont |- 

Oshawa,  Ont j 

Cobourg,  Ont 

Lindsay,  Ont 1 

Peterboro,  Ont 

Central  Ontario  Jet.,  Ont | 

Trenton,  Ont |- 

Sharbot  Lake,  Ont 

Napanee,  Ont 

Kingston,  Ont 


To— 

Agincourt,  Ont 

Myrtle,  Ont 

Oshawa,  Ont 

Cobourg,  Ont 

Lindsay,  Ont 

Peterboro,  Ont 

Central  Ontario  Jet.,  Ont. 

Trenton,  Ont 

Sharbot  Lake,  Ont 

Napanee,  Ont 

Kingston,  Ont 


Under  78 
pet. 
Pet. 


80 


90 


78  per    79  to  100  Over  100 
pet.      pet.      pet. 
Pet.      Pet.      Pet. 


68 
76 

87 


74 
80 


90 


84 


91 


Live  stoek  and  dressed 

meats,  carloads. 

78         79  to  100  Over  100 

pet.  pet.  pet. 

Pet.  Pet.  Pet. 


68 

87 


96 


74 
90 

96 


76 
91 


96 


31 


482 


ATLANTIC  PORT  DIFFERENTIALS 


■opj 


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484 


ATLANTIC  PORT  DIFFERENTIALS 


PIG  IRON,  CARLOADS. 


O  .Th 

bJD  > 

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J3    O 

To— 

Agincourt,  Ontario   1 

Myrtle,  Ontario    V    74 

Oshawa,  Ontario   J 

Cobourg,  Ontario   80 

Lindsay,  Ontario   "1 

Peterboro,  Ontario  

Central  Ontario  Junction,  Ont..   | 

Trenton,  Ontario J-    90 

Sharbot  Lake,  Ontario 

Napanee,  Ontario 

Kingston,  Ontario    J 

Broekville,  Ontario ^ 

Prescott,  Ontario i 

Smiths  Falls,  Ontario f 

Carleton  Junction,  Ontario  .  .  .  .  | 

Ottawa,  Ontario J 

Montreal,  Ontario "1 

St.  Johns,  Quebec !- 

Sherbrooke,  Quebec j 


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Percentages  of  the  Montreal  Rates. 


68 


80 


74 


80 


90 


76 


84 


91 


Montreal  Rates. 


Boston  Rates. 


76 


84 


91 


76 

84 


91 


XIV. — FROM   MEMPHIS,   TENN. 

Established  arbitraries  over  rates  from  St.  Louis,  Mo. 

XV. — DIFFERENTIALS  VIA  BREAK  BULK  ACROSS  LAKE  MICHIGAN. 

From  west  bank  Lake  Michigan  ports  via  routes  operating  across 
Lake  IMichigan,  break  bulk  rates  may  be  the  established  differentials 
under  the  rates  via  all-rail  routes. 


XVI. — LEXINGTON  BASIS  FOR  RATES. 

Rates  from  Lexington,  Ky.,  group,  and  proportior  al  rates  from  Cin- 
cinnati, which  are  proportions  of  through  joint  rates  from  Lexington, 
Ky.,  may  be  continued  on  existing  bases. 

XVII. — LUMBER,   ETC.,   FROM   CINCINNATI,   ETC. 

On  lumber  and  articles  grouped  therewith,  rates  from  Cincinnati 
and  points  in  Ohio,  AVest  Virginia  and  Kentucky  taking  the  same 
rates  on  lumber,  may  be  proportions  accruing  north  of  Cincinnati  of 
through  joint  rates  from  Lexington,  Ky. 


APPENDIX  485 

Xyjll. — LUMBER,   SASH.  DOORS.   BLINDS.   ETC..   FROM    MICHIGAN. 

Ou  lumber  and  artie-les  taking  same  rates,  carloads,  from  points  in 
the  lower  peninsula  of  Michigan :  To  New  York  City,  2  cents  under 
sixth-class  rates. 

On  sash,  doors,  blinds,  etc..  carload,  to  New  York  City,  3  cents  under 
fifth-class  rates. 

To  interior  base  points  in  New  York  and  Pennsylvania  and  to  Vir- 
ginia points,  bases  as  provided  herein  for  class  rates. 

XIX. — COMMODITY  RATES  SAME  AS  CLASS  RATES. 

Specific  commodity  rates  which  are  now  the  same  as  the  class  rates 
from  and  to  the  same  points  may  be  increased  the  same  amounts  as 
such  class  rates  are  increased. 

XX. COMMODITY  RATES   NOT  SUBJECT  TO   BASING  RATE,  CHICAGO  TO 

NEW  YORK. 

Commodity  rates  not  made  subject  to  a  basing  rate  from  Chicago  to 
New  York  may  be  increased  5  per  cent,  from  each  point  of  origin  from 
which  published  to  New  York,  and  the  rates  to  other  eastern  basing 
points  niSLX  be  based  thereon. 

XXI. — BRICK.   CLAY.   ETC. 

On  brick,  clay  and  articles  grouped  therewith  in  present  taritfs  to 
points  in  Central  Freight  Association  territory  and  Illinois  and  ou  the 
Mississippi  Kiver,  rates  from  western  Pennsylvania,  West  Virginia, 
central,  southern  and  eastern  Ohio,  and  the  Ashland,  Ky.,  group  may 
be  the  established  differentials  under  Pittsburgh. 

XXII. — COMPUTING  RATES  PER  TON, 

Rates  per  ton  may  be  increased  on  basis  per  100  pounds,  using  2,000 
pounds  as  the  ton. ' ' 


TABLE  OF  CASES  EEPORTED. 

Atlantic  City  Eailroad  Co.,  et  ah,  Board  of  Trade  of  the  City  of  Chicago, 

V.  (20  I.  C.  C.  504)  191],  357 

Baltimore  &  Ohio  Railroad  Company,  et  al,  New  York  Produce  Exc-hango,  v. 

(7  I.  C.  C.  612),  1898,   157 

Board  of  Trade  of  Chicago  v.  Atlantic  City  Railroad  Co.,  et  al.  (20  I.  C.  C. 

504),  1911 357 

Boston  &  Albany  R.  Co.,  Kenible  v.  (8  I.  C.  C.  110)  1889, 231 

Boston  Chamber  of  Commerce  v.  Lake  Shore  &  Michigan  Southern  Ry.,  ct  al, 

(1  I.  C.  C.  436),  1888,   Ill 

Boston  Chamber  of  Commerce  v.  New  York  Central  &  Hudson  River  R.  R.  Co., 

et  al.  (1  L  C.  C.  436)  1888, Ill 

Chamber  of  Commerce  of  the  State  of  New  York,  et  al.,  v.  New  York  Central 

&  Hudson  River  Railroad  Company,  ct  al.  (24  I.  C.  C.  55)  1912, 377 

Chamber  of  Commerce  of  the  State  of  New  York,  et  al.,  v.  New  York  Central 

&  Hudson  River  Railroad  Company   (24  I.  C.  C.  674)   1912,   409 

Chamber  of  Commerce  of  the  State  of  New  York  v.  New  York  Central  &  Ilml- 

son  River  Railroad  Company  (27  I.  C.  C.  238)   1913 419 

Grand  Trunk  Railway  Co.,  et  al.  Saginaw  Board  of  Trade  v.  (17  ].  C.  C.  128) 

1909,    343 

In  the  Matter  of  Differential  Freight  Rates  to  and  from  North  Atlantic  Ports 

(11  I.  C.  C.  13)  190.5,   283 

In  the  Matter  of  Export  Trade  of  Boston  (1  I.  C.  C.  24),  1887, 105 

In  the  Matter  of  Import  Rates  (24  I.  C.  C.  78),  1912,  403 

In  the  Matter  of  Import  Rates  (24  I.  C.  C.  678"),  I9I2, 415 

In  the  Matter  of  Import  Rates  (27  I.  C.  C.  245),  1913, 429 

Kemble  v.  Boston  &  Albany  R.  Co.,  et  al,  (8  I.  C.  C.  110),  1889, 231 

Kemble  v.  Lake  Shore  &  Michigan  Southern  Ry.  Co.,  et  al.   (5  I.  C.  C.  166), 

1892,    137 

Lake  Shore  &  Michigan  Railroad  Company,  et  al.,  Boston  Chamber  of  Com- 
merce v.   (II.  C.  C.  436),  1888,   Ill 

Lake  Shore  &  Michigan  Southern  Railway  Company,  et  al,  Toledo  Produce 

Exchange  v.   (5  I.  C.  C.  166)   1892,    137 

New  York  Central  &  Hudson  River  Railroad  Company,  et  al.,  Boston  Chamber 

of  Commerce  v.    (1  I.  C.  C.  436)   1888,   Ill 

New  York  Produce  Exchange  v.  Baltimore  &  Ohio  R.  R.  Co.,  et  al.,  7  I.  C.  C. 

612    (1898),    157 

487 


488  ATLANTIC   PORT   DIFFERENTIALS 

New  York  Produce  Exchange  v.  New  York  Central  &  Hudson  River  Railroad 

Company,  et  al.  (20  I.  C.  C.  504)  1911,  357 

New  York  Central  &  Hudson  River  R.  R.  Co.^  et  al.,  New  York  Produce  Ex- 
change V.  (20  I.  C.  C.  504)  1911, 357 

New  York  Central  &  Hudson  River  R.  R.  Co.^  et  al,  Chamber  of  Commerce  of 

the  State  of  New  York  v.  (24  I.  C.  C.  55)  1912, 377 

New  York  Central  &  Hudson  River  R.  R.  Company,  Chamber  of  Commerce 

of  the  State  of  New  York  v.  (24  I.  C.  C.  674)   1912,   409 

New  York  Central  &  Hudson  River  R.  R.  Company,  Chamber  of  Commerce  of 

the  State  of  New  York  v.   (27  I.  C.  C.  238)  1913,   419 

Saginaw  Board  of  Trade  v.  Grand  Trunk  Railway  Company,  et  al.  (17  I.  C.  C. 

128)    1909,    343 

Toledo  Produce  Exchange  v.  Lake  Shore  &  Michigan  Southern  Ry.  Co.,  et  al. 

(5  I.  C.  C.  166)  1892, 137 


TABLE  OF  CASES  CITED. 

Armour  Packing  Co.,  v.  U.  S.  (.209  U.  S.  56) 399 

Banner  Milling  Case  (19  I.  C.  C.  12S).   361 

Banner  Milling  Case  (14  I.  C.  C.  39S) 365,  366 

Bigbee  &  "Warrior  Rivers  Packet  Co.  v.  M.  i  O.  R.  R.  (60  Fed.  545) 364 

Board    of   Trade   of   Farmington,   Etc..    v.    The   Chicago,   Milwaukee   i    St. 

Paul  R.  R.  Co.  (1  I.  C.  C.  215), 126 

Boston  Chamber  of  Commerce  v.  L.  S.  i  M.  S.  Ry.  Co..  et  al.  (1  I.  C.  C. 

436),    150, 153,  235 

Chamber  of  Commerce  of  the  State  of  Xew  York  v.  X.  Y.  C.  «Sr  H.  R.  R.  Co. 

(24  I.  C.  C.  674), 417.  41S.  431 

Commercial  Club  of  Omaha  v.  Chicago,  Rock  Island  &  P.  R.  Co.  (6  I.  C.  C. 

647),    215 

Cosmopolitan  Shipping  Co.  v.  Hamburg- American  P.  Co.  (13  I.  C.  C.  266),..     399 

Detroit  Board  of  Trade  v.  Grand  Trunk  Ry.  of  Canada  (2  I.  C.  C.  315), 350 

Enterprise  Mfg.  Co.  v.  Georgia  R.  R.  Co.  (12  I.  C.  C.  451), 355 

Federal  Sugar  Refining  Co.  v.  B.  &:  O.  R.  R.  Co.  (17  I.  C.  C.  40), 391 

Frt.  Bureau  of  Cincinnati  C.  C.  v.  Cincinnati,  X.  0.  &  T.  P.  R.  Co.  (7  I.  C.  C. 

180),    215 

Green  Bay  Bus.  Men's  Assn.  v.  L.  S.  &  M.  S.  Ry.  Co.,  ei  aJ.  (15  I.  C.  C.  59).     350 
Indianapolis  Freight  Bureau  v.  C.  C.  C.  &  St.  L.  Ry.  Co.  (23  I.  Cx  C.  195),.  .     401 

In  re  Investigation  of  Advances  in  Rates  (20  I.  C.  C.  243) 3S6 

Investigation  &  Suspension  Docket  Xo.  26  (22  I.  C.  C.  604), 400 

Interstate  Commerce   Commission   v.   Alabama   Midland  R.   Co.    (16S   U.   S. 

144).    20S,  227 

Interstate  Commerce  Commission  v.  B.  &  O.  R.  R.  Co.  (145  U.  S.  263), 207 

Interstate  Commerce  Commist^ion  v.  Texas  &  P.  R.  Co.   (162  U.  S.  197) 208 

Import  Rate  Case,  see  Interstate  Commerce  Commission  v.  Texas  &  Pacific  R. 

Co. 

In  the  Matter  of  Differential  Freight  Rates  (11  I.  C.  C.  13), 375.  3S9 

In  the  Matter  of  Export  Trade  of  Boston  (1  I.  C.  C.  24) 235,  327 

In  the  Matter  of  Import  Rates  (24  I.  C.  C.  78),  3S1,  383,  402,  412,  413,  414,  424,425 

In  the  Matter  of  Import  Rates  (24  I.  C.  C.  78  and  678), 424,  425 

Jennison  Case  (18  I.  C.  C.  113), 365 

Kemble  v.  Boston  &  Albany  R.  Co.,  et  al.  (8  I.  C.  C.  110), 327,  338 

Kemble  v.  L.  S.  &  M.  S.  R.  Co.  (5  I.  C.  C.  166) 235,  289 

Xew  York  Board  of  Trade  &  Transportation  v.  Pennsylvania  R.  R.  Co.,  et  <W, 

(4   I.   C.   C.   447),    237,  239 

489 


490  ATLANTIC   PORT   DIFFERENTIALS 

New  York,  New  Haven  &  Hartford  E.  R.  Co.  v.  Piatt,  et  al.  (7  I.  C.  C.  323),  241 
New  York  Produce  Exchange  v.  New  York  Central  &  Hudson  Eiver  E.  Co. 

(3   1.   C.   C.   138),    236 

New  York  Produce  Exchange  v.  B.  &  0.  E.  E.  Co.,  et  al  (7  I.  C.  C.  612),.  .290,  324 

North  Atlantic  Ports  Case  (11  I.  C.  C.  13),   384 

Pratt  Lumber  Co.  v.  C.  I.  &  L.  Ey.  Co.   (10  I.  C.  C.  29), 350 

Railroad  Commission  of  Kansas  v.  A.  T.  &  S.  F.  E.  Co.  (12  I.  C.  C.  407),.  .  .  .  401 

Eend  v.  Chicago  &  Northwestern  E.  Co.  (2  I.  C.  C.  313), 155 

Texas  &  Pacific  E.  Co.  v.  Interstate  Commerce  Commission  (162  U.  S.  197),.  . 

207,  238,  241 

Troy   Case,   see   Interstate   Commerce   Commission   v.    Alabama   Midland   E. 

Co. 

United  States  v.  Trans-Missouri  Freight  Association  (166  U.  S.  290), 209 


INDEX. 


INDEX. 


Accounts,  no  uniform  method  of,  in  18812,   85 

Act  to  regulate  commerce,  aim  of,  228 

Adjustment  of  Rates,  a  question  of  national  importance,  12 

a  question  of  general  interest,   74 

more  a  theoretical  than  practical  question, 22 

complex  and  intricate,   43 

should  be  flexible,  42 

a  question  of  administration,  affecting  entire  internal  and  foreign  com- 
merce,      460 

has  no  practical  be9ring,when  carrying  capacity  is  taxed, 15 

arbitrary,  cannot  be  maintained  for  ai^y  length  of  time, 17 

proper  which  does  not  interfere  with  natural  distribution,   18 

claim  of  Baltimore  that  its,  is  only  natural  one,  domestic  and  export 

basis   being   same,    398 

Adjustment    of    Transportation    Rates    to    Seaboard,    report    on,    by 

Fink,   5,  t'i  seq. 

Advantages  of  New  York,   133 

New  York  and  Montreal  compared,   371 

Advantages  of  Ports,  urged  by  each, 395 

Advantages  of  Transportation,  equalization  of,  a  proper  question, 331 

Advisory  Commission,  Preamble  and  Resolutions  appointing,  67 

members  of,   67 

participants  before,  commercial  organizations,    71 

carriers  non-particijiation  in  proceedings  before,   71 

Report  of, 69,  ct  seq. 

principles  urged  for  determining  differential  rates:     («)   distance  prin- 
ciple, (&)  cost  principle,  (c)  competition  principle, 78 

summary  of  findings  of  in  1  I.  C.  C.  436,  461, 133 

reference  to,    , xiv 

reference  to,  that  result  of  test  of  differentials  should  be  taken, 216 

resume  of  Report  of, 289 

reference  to  report  of, 164,  288 

conclusion    of,     101 

Agreement,  Differential  Rate,  text  of,  1,  et  seq. 

of  1876  states  correct  principles  of  adjusting  rates 24 

in  respect  to  rates  necessary, 11 

Albany,  earnings  on  carload  shipments  to,    120 

American  Express  Company  solicitors  of  business  in  Europe  for  shipnuMit 

via    Boston,    423 

Arbitrators,  Interstate  Commerce  Commission  consented  to  act  as  in  1912,.  .  245 
but  could  not  make  adjustment  of  rates  contrary  to  that  made  in  dis- 
charge of  duties  under  the  law,  ibid. 

493 


494  ATLANTIC   PORT  DIFFERENTIALS 

' '  Arbitrary,  ' '  a  technical  term  expressing  a  difference  in  rates  which  does 

not  change  with  the  through  rate,   117 

a  terra  of  no  alarming  significance,   131 

but  see  Dissenting  Opinion  in  Boston  C.  C.  v.  L.  S.  &  M.  S., 134 

added  to  New  York  to  make  Boston  rate, 145 

Atlantic  Ports,  railways  serving  in  1876,  436 

course  of  trade  between  West  and,  in  1S76,  448 

relation  of  rates  to  1888,   119 

relative  magnitude  of,   453 

Baltimore,  advantageous  position  of,  respecting  trade  with  West, ix 

differences  in  rates,   3 

difference  in  rates  to,   18V  5,   9 

difference  in  rates  to,  under  Differential  Rate  Agreement,   10 

views  of,  on  differential  rates  expressed  to  ^^dvisory  Commission, 74 

its  contentions  in  respect  to  differentials,  1898,   164 

differentials  at,  1905, 290 

differential  from  Chicago  on  distance  basis  approximates  what  it  has 

under  arbitrary   differential, 226 

differential  to,  the  most  difficult  question,  226 

advantages  of,  taken  away  by  reduction  of  differentials  to  New  York,.  .  328 

does  not  have  on  distance  basis  what  it  is  entitled  to, 292 

welfare  of,  vital  to  Baltimore  &  Ohio,   89 

claim  of  carrying  cost  of  moving  freight  thereto,   84 

claim  of,  on  account  of  location,   381 

assertion  of,  that  its  adjustment  on  domestic  and  export  traffic   (rates 

being  the  same)  is  the  natural  one,   398 

disadvantages  of  water  to, 169,  327 

ocean  freights  from  in  1881,  greater  than  from  New  York,   99 

reasonable  to  expect  higher  ocean  rates  at  than  New  York, 25 

ocean  rates  at,  do  not  differ  materially  from  Philadelphia,    212 

ocean  rates  at,  less  than  New  York,   36 

insurance  rate  at,  as  an  element,   323 

elevation  charges  less  than  at  Boston,   322 

increased  storage  capacity  for  grain  at,    18 

increased  receipts  at  resulted  from  rate  war  of  1876, 17 

large  quantities  of  grain  grown  in  territory  tributary  to, 389 

cost  of  delivering  grain  into  hold  of  vessel  at, 399 

Baltimore  &  Ohio  Railroad,  chartered, ix 

progress  of,  westward,    ix 

began  in  1865  to  compete  for  grain  traffic, 16 

policy  of,  not  to  carry  at  a  loss, 16 

failure  of  crops  along  as  a  cause  of  reduction  in  tonnage, 16,  21 

claim  of,  that  rates  be  adjusted  in  accordance  with  length  of  competing 

routes, 4Q 

a  Baltimore  road,   ir^ 

crippled  condition  of  in   1893-1895,    200 

burden  of  defence  in  1912  controversy  by,   381 

loss  in  performing  lighterage  at  Kew  York, 386 

Baltimore  and  Philadelphia,  advantage  of  load  line  at, 169 


INDEX  495 

Baltimore  and  Philadelphia — Continued. 

heavy  class  of  traffic  hauled  through, 396 

competitive  conditions  at,   created   by   Pennsylvania  and   Baltimore   & 

Ohio  systems,   400 

port  charges  at  less  than  at  New  York 169 

urge  distance  to  western  points,   214 

Baltimore  Bates,  offer  of  New  York  roads  to  transport  at, 3.S5 

Pennsylvania  Eailroad  might  haul  to  New  York  for,  because  of  com- 
petitive reasons  but  could  not  with  justice  be  compelled  so  to  do,  .  .  327 

claim  of  Boston  for,  in  1912,   387 

established  policy  of  carriers  to  make,  to  Norfolk  and  Newport  News,.  .  424 

Bases  op  Rates  and  differentials, 463,  et  seq. 

Berth  Shipments,  described ^ 170 

Berth  and  Cargo  Shipments  of  grain,  method  of,  168 

Berth  and  Cargo  business,  relative  amount  of  unknown,  174 

Bills  cw  Lading,  through,  provision  for, 2 

no  joint  ocean  and  rail  to  be  given,   3 

through,  proportion  under  for  rail  transportation  not  less  than  current 

local  rates,   2 

through,  rare  in  export  of  grain, 297 

Blockades   (embargoa)   a  permanent  injury,   18 

Boston,  rates  to  be  not  less  than  to  New  York,  2 

distance  from  Chicago, 145 

second  port  of  entry  in  U.  S.,  1886,   121 

railroads   sendng,   1888,    ., .  .  .  115 

rates  to,  in  1888,  from  various  western  cities,   122 

grades  of  roads  to, -. 422 

earnings  on  carload  shipments  to,    120 

as  a  grain  market,   30 

ocean  rates  from  less  than  New  York,   30 

has  during  closed  season  higher  ocean  rates  than  New  York, 423 

a  non-participant  before  Advisory  Commission,   101 

differentials  at,  1882,  289;    1887,235;    1888,114;    1889,234;    1892,...  140 

rebate  at,  on  through  billed  foreign  freight 118 

New  York  rates  to,  by  paying  refund, 235 

proportional  rates  to,  if  based  on  distance  alone,   127 

percentage  basis  of  rates  recommended  for.   152 

percentage  principle  of  differentials  at,  as  recommended  by  Interstate 

Commerce   Commission,   substantially  adopted,    236 

has  an  export  and  a  domestic  rate,  legality  of  not  considered  in  1898,.  .  .  161 

export  rates  at,  less  than  domestic, 118 

export  rate  at  since  1870,  same  as  New  York,  234 

export  rates  on  grain  and  provisions  to,  may  properly  be  less  than  on 

domestic,  107 

export  rates  might  be  less  than  domestic  under  Differential  Agreement, 
and  such  arrangement  since  approved  by  Interstate  Commerce  Com- 
mission,     327 

basis  for  differential  to, 145 

rates  to,  made  by  a'ddition  of  arbitrary,   145 

rates  to  over  New  York,  are  arbitrary, 117 


496  ATI-ANTIC  PORT  DIFFERENTIALS 

Boston — Continued. 

rates  per  ton  mile  to,  1888,   12-1,   146 

car  earnings  on  certain  traffic  to,   147,  148 

import  rates  from  Boston,  lower  than  from  New  York,  alleged  to  be  dis- 
criminatory against  latter,   422 

import  rates  from,  same  as  New  York,  417 

imports  to  diiferential  territory,  through, 389 

less  import  rates  at,  than  at  New  York  said  to  be  harmful  to  latter,  .  .  .  427 

reductions  in  import  rates  from,  1909, 406 

equality  of  rates  with  New  York  not   supported  by  several  important 

elements,   126 

cost  of  service  to,  from  Chicago  exceeds  that  to  New  York, 121 

terminal  costs  at,  said  to  be  less  than  at  New  York,   425 

no  lighterage  charges  at,  in  1888, 118 

lighterage  and  wharfage  charges  at,  1888, ]  19 

wharfage  charges  at  paid  by  shippers,  118 

dockage  and  port  charges  less  than  New  York  at,   174 

elevation  charges  at,  higher  than  at  Baltimore  and  Philadelphia, 322 

insurance  at,  less  than  from  Philadelphia  and  Boston,  323 

claim  of,  for  Baltimore  rates  in   1912,    387 

rates  via  differential  routes  from,  prescribed,  1912, 417 

solicitation  of  business  in  Europe  for,  by  Americaa  Express  Company,  423 

projects  of,  to  meet  Erie  Canal  advantages  to  New  York, 129 

lines  to,  have  right  to  make  such  rates  to,  as  see  fit  but  must  not  unduly 

burden    other    traffic,     400 

Boston  and  New  York  Merchants  compete  in  New  England, 121 

Buffalo,  not  in  Differential  Territory,  322 

distance  from  to  ports,   322,  395 

elevator  charges  at,    204 

charges  for  elevation  at,  absorbed  by  carriers, 360 

included  in  ex-lake  grain  rate,    .  . : 372 

combinations  of  rates  on  grain  on,  less  than   at  Detroit  and   Toledo, 

1892, ."....  153 

Buffalo  Grain  Pool,  described,  321 

Canal  Routes,  list  of  1876,  436 

Capacity  of  Trunk  Lines,  taxed  to  full  extent  during  portion  of  year,  ....  15 

Car  Earnings  on  certain  traffic  to  New  York  and  Boston,  147,  148 

on  shipments  to  Boston  and  East  Boston, 120 

on  shipments  to  New  York  and  Albany,   120 

Cargo  Business  usually  corn,  not  wheat,  174 

Cargos,  full,  by  ports  1893-1896, 175 

Cargo  Lots  cannot  be  distinguished  from  berth  lots  in  freight  rate, 211 

Cargo  Rates,  same  from  all  ports,   297,  394 

Cargo  and  Berth  Business,  relative  amount  of  unknown,   174 

Cargo  and  Berth  Shipments  of  grain,  method  of, 168 

Carriers,  importance  of  differentials  to,  great, 228 

interests  of,  should  be  kept  in  view  in  determining  differential  rates,.  .  325 

cannot  be  considered  as  one  great  and  single  system, 400 

Changes  in  ocean  rates,   213 ;    in  rail  rates,  ibid. 


INDEX  497 

Charges,  relative  transportation,  by  rail  to  seaboard,  tlic  question  reported 

on  by  Fink,  9,  et  fcq. 

for  transportation   have  steadily  declined,    9.") 

Chicago,  distance  to  Boston, 145 

distance  of,  from  ports,  189S,   11)5 

short  line  distances  to  ports,  1905 1291 

all  traffic  does  not  orij^inate  at,   101,  29 1 

rate  from,  proportioned  for  other  Miildle  West  points,   73 

re-shijjping  rate  on  grain   at,    3G8 

Classification  of  flour,  grain  and  provisions,  1888,  116 

Combination  Eates  on  grain  on  Bufl'alo  loss  than  on  Detroit  and  Toledo, 

1892, 153 

Communities  must  not  lie  unjustly  discriminated  against  by  relative  rates,  11 

in  adjusting  rates  between,  competition  must  be  considered,   40 

Communities  and  Merchants,  interest  of  in  relation  of  rates, 29 

Competition,  principle  of,    92 

in  railroad  rates  ruinous  and  unsatisfactory,   93 

in  other  than  railroad  business  great  regulator  of  charges, 92 

as  an  element  in  determining  relation  of  rates,   128 

fixes  rates  to  New  York,    119 

factors  of,  very  strong  at  New  York, 148 

causes   reductions   in    rates 4(50 

cause  of  ocean  rates,    330 

of  railroads  caused  distribution  of  traffic,   18 

between  carriers  to  ports,  necessary  consider,  the  distinction   between 

local  or  non-competitive  traffic  and  through  or  competitive  traffic,.  .  436 

communities  must  have  equal  chance,  under  relative  rates, 11 

between  cities  in  adjusting  rates  must  be  consiilered,   40 

between  grain  markets,  effect  of  on  adjustment  of  rail  rates, 29 

of  carriers  and  ports  granted  by  equalization  of  through  rates,   328 

prevents  observance  of  rates,   42 

least  affects  shipments  for  consumption  at  interior  points  in  V.  8.,   .  .438,439 

field  of,  begins  in  Ohio  and  goes  stronger  as  advance  west 437 

degrees  of,  in  respect  to  rival  trunk  lines  and  cities,    437 

highest  in  respect  to  direct  shipments  from  interior  to  Eurt)p('  and  vice 

versa,    438,   439 

in  shipments  for  exportation  or  coastwise,  not   as  strong  as  in   direct 

shipments,   438,  439 

differs  as  between  different  articles,   442 

impossible  to  eliminate,  without  doing  vio]en(e  to  commercial  interests,  459 

if  none  for  export  trade  pro  lata  principle  would  be  satisfactory, 23 

brought  about  ditierentials, 101 

difficulties  arising  out  of,  constitute  "railroad  j)roblem  "  of  1876, 458 

control  of  trunk  lines  over  competitive  traffic  growing  weaker  in  1876,  .  .  147 

in  New  England  by  Boston  and  New  York  merchants,   121 

export  traffic  competitive  and  hence  rates  should  be  so  adjusted  that  rival 

routes  can  compete  for  it,  327 

Competitive,  export  traffic  is,   298 

Competitive  Forces,  the  controlling  influence  over  conunerce  between  west 

and  seaboavd,  ■  •. ;  •  • ••••■••••■■ 435 

32 


498  ATLANTIC   PORT    DIFFERENTIALS 

Competitive  Conditions,  railroads  allowed  latitude  in,    227 

Concessions  in  rates  to  New  York  and  other  cities  probable  iu  1880, 14 

Constitution,  preference  clause  of,  inapplicable  to  freight  rates,   385 

Constructive  Mile.\ge  used   sometimes  as  basis  for  computation   in   Per- 
centage System,  1-^1 

Contiguous  Territory  affords  control  of  tratfic  by  ports, 398 

large  quantities  of  grain  grown  in  territory  trilnitary  to  Philadelphia 

and  Baltimore,  389 

Controversy  in  1898,  function  of  Interstate  Commerce  Commission  in,  ....  321 

in  1904,  early  narrowed  to  export  and  import  traffic, 2S(i,  293 

in  1905,  relation  of  Interstate  Commerce  Commission  to,   324 

in   1912,  burden   of   defence   by   Baltimore   &   Ohio   and   Pennsylvania 

Railroads,    381 

Corn,  chief  grain  exported  in  full  cargos, 174 

diversion  of  trade  in,  due  to  difference  in  rates  to  Philadelphia   and 

Baltimore  and  available  ocean  tonnage  at,  453 

Cost  to  the  roads  of  transporting  has  much  to  do  with  charges, 91 

of  delivering  grain  to_  vessel  .it  each  port,  the  same,   2 

of  delivering  grain  into  hold  of  vessel  at  New  York  and  Baltimore 399 

of  transfer  of  traffic  at  New  York  greater  than  at  Boston, 388 

of  moving  freight,  an  argument  by  New  York  interests,   80 

claim  of  Baltimore  and  Philadelphia  regarding,   84 

items  properly  included   in,    81 

if  obtainable  and  if  applied  would  seriously  disturb  conditions,   88 

if  obtainable  and  applied  would  produce  discriminations  aganist  locali- 
ties,      88 

as  suggested  by  grades  and  curvatures,  opinions  respecting, 81 

reports  on  for  1880-1881,  New  York  Central,  Erie  and  Pennsylvania.  .  .  84 

Cost  Principle,  Advisory 's  Commission  's  view  respecting, 80 

difficulties  of  applying  as  between  roads  and  places,  insurmountable,.  .  .  91 

application  of,  might  be  ruinous  to  New  York, 90 

no  reliable  information  to  determine,    86 

cannot  be  applied  to  long  distance  traffic,  91 

Cost  of  Service  to  Boston  from  Chicago  exceeds  cost  to  New  York, 121 

cannot  justify  differentials,  argued  by  New  York  in  1898, 16(3 

not  sole  or  most  important  factor  ?.s  controlling  rates,   127 

supposed  to  be  represented  by  distance.  292 

assumed  to  be  measured  by  distance,   215 

used  in  sense  of  cost  of  moving  freight, 80 

Cost  op  Transportation,  average,  37 

to  New  York  by  Erie  Canal, 31 

probably  less  at  Philadelphia  than  at  New  York  ;    at  Baltimore,  still  less,  86 

Cotton,  method  of  making  th/ough  rates  for,  329;    inapplicable  for  grain,.  .  330 

Crop  Failure  as  cause  of  reduction  in  tonnage, 20 

Differences  in  rates,  1 869,    9,99 

relative   (percentage)   adopted,  1876,    , 9 

fixed,  abandoned,  1876, 9 

percentage,  abolished  by  Differential  Rate  Agreement, 2 

fixed,  established  by  Differential  Rate  Agreement 2 


INDEX  499 

DiFJERENCBs — Continurfl. 

to  Baltimore  luiclcr  New  York,   3 

to  Philadelphia  under  New  York,   3 

to  Philadelphia  and  Baltimore,  1875,   9 

Differentials,  meaning  of  term, 324 

proposition  stated, xii.  324 

making  rates  by  means  of,  not  unusual,   xiii 

course  of,    xvi 

application   of xvii 

connection  with   Percentage   Map,    ,\ix 

amounts  of, 463,  ct  .vrr/. 

cannot  determine  what,  would  offset  advantages  of  New  York, 213 

result  of  should  be  taken  as  test  of,  ... 21(i 

interest  of  carriers  should  be  kept  in  mind  in  determining, 32.3 

import,  recommended  1912, 407 

early  amounts  of,   xiv 

early  testimony  concerning, x 

arbitrary  differences  above  or  below  the  New  York  rate  are  termed,  .  .  .  324 

fixed  amounts  independent  of  amount  of  rates 213 

are  result  of  compromise,  arbitration,  agreement,  resorted  to  as  the  only 

means  so  far  found  of  averting  rate  wars,   3Sfi 

principle  of,  legitimate, 209 

cannot  be  abstractly  just  but  only  fair,   224 

fixing  of,  not  within  jurisdiction  of  Interstate  Commerce  Commission,  237 

established  with  view  of  influencing  movement  of  export  business,  .  .  \  .  326 
if  purpose  of  is  to  equalize  cost,  cost  of  placing  grain  on  ships  must  be 

same,    210 

purpose  of,  alleged  to  be  division  of  traffic,   385 

purpose  of,  to  distribute  export  traffic, .' 208 

purpose  of,  to  distribute  traffic  among  carriers 226 

a    temporary    arrangement    only,     102 

history  of,  to  1 898,  stated,   162 

in  1898  to  Atlantic  ports,   161 

in  1898,  probably  too  large,  334 

just  at  one  time  may  not  be  at  another,   99 

reasons  for,  in   competitive  forces,    99,  101 

arbitrary,  maintained  so  long  as  interests  of  comjieting  railroads  suited,  17 

not  strictly  adhered  to,  1878-1881,  claim  of  New  York  Central,   14 

maintenance  of  doubtful, 1!)9 

perhaps  not  maintained  to  1896,   220 

conditions  determining  are  continually  varying,    165 

always  exceeded  difference  in  ocean  rates,  329 

to  Boston  1888,  114 ;    in  1889,  grain  and  sixth  class,   23  1 

to  Boston,  basis  for,    145 

to  Boston,  rule  to  show   cau^e   why   they  sliould   not    l)e   made  on   j)er- 

eentage   basis,    156 

to  Boston  alleged  excessive,  unjust  and  unreasonable,    154 

New  York  's  contentions  in  respect  to,  1898,   Kil 

cannot  be  justified  by  cost  of  service,  argued  by  New  York,  1898,   ....  I(i6 

Philadelphia  contentions  in  respect  to, 164 


500  ATLANTIC   PORT   DIFFERENTIALS 

Differentials — Con  tinued. 

Baltimore's  contentions  in  respect  to,  1898,   ." 164 

to  Baltimore  on  arbitrary  basis  approximates  what  it  would  have  on 

distance  basis,   226 

effect  of,  price  of  grain  considered,   214 

most  effect  of,  on  movement  of  grain,   221 

on  grain,  lighterage  cost  urged  as  justification  of,   168 

on  iron  and  steel  for  export  reduced  in  1904, 290 

reductions  in,  on  grain  and  iron  and  steel,   326 

on  grain  for  export  reduced  in  February,  1899,   290 

westbound,  since  1 887,    290 

westbound,  not  considered  in   1905,    337 

alleged  to  cause  variation  in  ocean  rates,   ., 29  1 

Differential  Adjustment  not  ahvays  adhered  to 391 

Differentials,  Ex-Lake, xiii,  213 

course    of,    • xvii 

described   and   stated,    162 

reasons  for, 336 

not  attacked  in  1898  and  not  disturbed,  .  .    22.) 

for  various  grains  (1905)  recommended,  311 

Differential  Lines,  rates  via,  from  Boston  prescribed,  1912,  412 

Differential  Routes,  rates  via  from  Boston,  prescribed,  1912, 417 

DDj'ferential  Bate  Question,  a  national  one,  75 

Differential  Route,  defined,  xiii 

Differential  Rates,   history  of,  and  related  matters  prior  to  19(l4,  .  ..287,c<  .^en. 

no  difficulty  between  railway  managers  in  fixing,  or  directing  shipments,  439 

connection  between  Percentage  System  and,    345,  note 

apply  to  traffic  passing  through  differential   territory  as  well   as  that 

originating  in  or  destined  thereto,     324 

considerable  importance  of, 205 

dispute    beg-an,    323 

views  on,  urged  before  Advisory  Commission, 74 

1.  New  York  saying  differences  in  rates  wholly  wrong. 

2.  Baltimore  saying  differentials  right  in  principle,  but  too  small. 

3.  Philadelphia  saying  differentials  should  continue  but  no  discrimina- 

tion between  Baltimore  and  Philadelphia. 

principles  urged  to  determine,  before  Advis-ory  CommiFsion,   78 

arrived  at  by  years  of  contention  and  struggle,  132 

elements  of,  various  and  complex,   331 

no  absolute  standard,   227 

principle  of,  legitimate, 228 

causes  of,    132 

distance  principle  as  element  to  determine,    78 

as  affected  by  cost  principle 80 

competition  as  element  in  determining, 128 

fundamental  principle  for,  not  found, 325 

effect  of,  on  movement  of  traffic  can  only  be  approximately  determired,  298 

part  of  a  large  complicated  .system,   133 

pecuniary  importance  of,  to  carriers  great 228 

Erie  Canal  has  important  beaj-ing  on,   339 


INDEX  5Q1 

Differential  Rates — Cant  in  iied. 

report  of  Advisory  Coiinnission   on,    fit 

restricted  before  Advi,>-ory  ("oniiiiii^sioii  to  diH'eniu-eK  in  lates  ;is  iietwccri 

Atlantic    jiorts,     Tli 

reconiniended   abolisiieil   and    percentage    basis    (Boston    110%    of    New 

York)    ordered,    !.")•_' 

prescribed    (1912),    4(i'J 

relation  of  Interstate  Commerce  Commission  to,  in  1898  controversy,.  .2(1(5,  2U7 

general  investigation  by  Interstate  Conmierce  Commission  in   li)i)4,   .  .  .  286 

causes  of  1905  controversy, 286 

alleged  to  divert  traffic  from  New  York,    297 

to  Boston  1882,  289 ;    1892,    140 

at  Philadelphia  and   Baltimore,    1905,    290 

amount  of, 

Eastbound,  all-rail,  domestic,   245 

Eastbouud,  all-rail,  export,   246 

Westbound,  all-i-ail,   domestic,    247 

Westbound,  all-rail,  import, 249 

Rail  and  lake,  westbound,   249 

Ex-Lake,  from  Lake  Erie  ])orts  to  Atlantic  ports, 249 

stated  in  currency, 324 

to  and  from  North  Atlantic  Ports,  Memo.,  of  Auditor,   Interstate  Com- 
merce Commission,    243' 

see  Fink:    Adjustment  of  transijortation  rates  to  fealioard, 5,  et  scq. 

Differential  Rate  Agreement,  provisions  of,    xv 

text,    J 1 ,   ct   seq. 

j^urpose  of,   10,  293 

provision  for  modification  by  notice,   3,  10 

intended  permanent,   3,  10 

modification  to  be  by  nuitual  agreen.ent,   3,  10 

parties   to,    3 

agreements  inconsistent  with,   annulled,    3 

adopted,  1877,   10 

provision  for  modification,    10 

broken  without  attempting  alteration  by  nutual  agreement,  1880, 10 

notice  of  withdrawal  from,  by  New  York  Central,  1880,   10 

recognizes  fixed  differences  in  inland  rates  based  on  prevailing  ocean 

rates,    26 

based  on  relative  ocean  rates, 394 

reference  to  terminal  charges  at  time  of,   107 

not  considered  lawful  by  the  Interstate  Commerce  Commission, 401 

not  recognized  by  Interstate  (Commerce  Commission  as  lawful, 425 

did  not  include  Newport  News  and  Norfolk,   383 

Differentia!,  Territory,  described,  < 101,  291,  380 

Differentials  ai)ply  to  traffic  moving  through, 324 

Buffalo  not  in,  322 

22%  of  imports  through  Boston  for, 389 

rates  to  and  from  in  zones  (percentage  system),  385 

Difficulties  and  Complications  encountered  in  determining  i-rojier  and 

equitable  adjustment  of  relative  rates, 11 

Direct  Shipments  for  export,  highly  competitive, 438, 439 


502  ATLANTIC   PORT   DIFFEREXTIALS 

Direct  Shipments— ;Coniimied. 

no  difficulty  in  fixing  differential  rates  on,    439 

Disadvantages  op  Water  Haul  at  Baltimore  and  Philadelphia,   1()9,  327 

Distribution  op  Trabfic,  constancy  of,  due  to  certain  laws  and  conditions, 

not  accidental  causes,    ]-t 

in    1878-1880   satisfactory,    14 

equitable,  cannot  be  pre-determined, 11 

due  to  railroad  competition,   17 

governed  by  certain  laws  and  conditions,   15 

conditions  that  control : 

1.  Eelative  carrying  capacity  of  transportation   lires  and  their  ter- 

minal facilities,   15 

2.  Storage  capacity  of  private  warehouses,   3  8 

3.  Established  commercial  relations  of  each  city  in  this  and  foreign 

countries,     19 

4.  Location  of  the  competing  railroads,  19 

5.  Practice   of   competing  railroads  in   attaching  to,   and   retaining, 

shippers,    21 

DisCRiMiNATJON,  unjust,  against  ccmmunities  must  not  be  created  by  relative 

rates,    11 

Differential  Controversy  produced  rate  wars, 324 

in  1898  between  New  York,  Philadelphia  and  Baltimore,    IGl 

Distance,  principle  of,  rejected  by  New  York 80 

principle  of,  for  determining  differential  rates,   78 

carriers  allowed  latitude  in  respect  to  disregarding,    215 

said  to  be  habitually  disregarded, 214 

frequently  disregarded  by  carriers,    215 

by  water   to   foreign   destinations,    297 

not  a  circumstance  without  value  in  determining  railroad  tariffs, 80 

an  element  in  determining  amount  of  rate,  on  assumption  it  corresponds 

with  cost  of  service,    215 

of  least  weight  where  competition  most  influential,   80 

does  not  supply  controlling  principle,   80 

principle  of,  does  not  stand  test  of  competition,   80 

relative,  as  measure  of  rates,  23 

alone,  cannot  determine  ex-lake  differentials, 396 

supposed  to  express  cost  of  service,    292 

to  points  of  origin  urged  by  Philadelphia  and  Baltimore, 214 

percentages  of,  other  ports  from  western  i)oints  to  New  York, 79 

Buffalo  to  ports, 322,  395 

short  line,  in  1882  from  various  western  points  to  Atlantic  ports, 79 

short  line  Chicago  to  ports,  1905,  291 

Chicago  to  New  York  and  Boston,    152 

from  Chicago  to  ports,  1898,   165 

to  Boston  from  Chicago,    145 

Division  oi'  Through  Eate  not  to  be  considered,  153,  364 

mileage  for  purpose  of,   116 

export  rate  is  in  essence, 240,  242,  328 

unimportant  in  connection  with  through  rate  as  unit, 126 

difference  is  due  to  deduction  of  lighterage  and  wharfage  before  pro- 
rating,    ; 121 


INDEX  503 

Davisiox  OF  TiiKoiHiu  Katk — ('(tiiiiinud. 

agreed  iipiui  .■uul  based  on  distance,   117 

Chicago  to  Xew  Vrnk  and  l!(.ston,  J892, 147 

Division  of  Traffic,  ))uriio«e  of  differentials, '2'2:^,  385 

differentials  established  with  view  of  influencing,    326 

iu  1879,  results  of,   21 

at   source  proi)osed,    22, 23 

Dockage  expenses  and  port  diarges  less  at  Boston  than  New  York,   174 

Domestic  Bate  greater  than  ex]iort  not  unjust  discrimination, 241 

on  grain  more  than  export  to  jxirts, 399 

Drayage  charge  at  New  York 422 

East  Boston,  earnings  on  carhiad  sliipnients  to  Boston  and,   120 

lighterage  charges  at, 147 

Eastbound  dead  freight,  points  of  origin  of, 166 

East  and  Westbound  Traffic,  greater  movement  eastbound,  86 

differ   iu   character, 129 

Economies  in  transportation  by  shipping  grain  in  bulk,  4.t7 

Elevator  Charges,  at  Buffalo,  204;   absorption  of,  by  carrier,  360;    included 

in  ex-lake  grain  rate,   372 

higher  at  Boston  than  Baltimore  and  Philadelphia, 322 

Elevator  Storage,  capacity  at  ports,  1898,  200;    ownersliip  of,   201 

Embargos,  see  Blockades. 

Expenditures,    by    United    States    for    liarbor    improvements    at    different 

ports, 217,  39.5 

Equal  Through  Bates  insisted  on  by  New  York  merchants,  .  .  .  .' 37 

there  must  be,   23 

difficulties  of,  in  trattic  under  domestic  bills  of  lading,   26 

based  on  lowest  ocean  rates,  an  insurmountable  proposition, 25 

objectionable  to  carriers,    25 

protests  against  by  Chambers  of  Commerce,  25 

attempted  iu  1876,   24 

during  Minimum  Freight  Agreement,    330 

Equal    Freight    Bates    to    all    the   ports    proposed    by    New    York    mer- 
chants,    18  (note) 

as  between  Boston  and  New  York  not  supi)orted  by  several  important 

elements,   126 

must  be,  if  equalizaticm  of  cost  to  be  had, 176 

to  all  seaboard  ports,  claimed  just  by  New  York  Central,  1880,   11 

Equalization  of  Conditions,  no  duty  of  railroads,  389 

of  cost  of  transjioration,  purpose  of.  Differential  Bate  Agreement,   ...  2 

of  advantages  of  transportation,  a  proper  question,   331 

of  cost  of  exports  means  at  least  equal  inland  rates, 176 

of  inequalities,  no  business  of  common  carriers 125 

change  in,  as  ground  for  withdrawing   from   Differential    Kate  Agree- 
ment by  New  York  Central,  1880,   10 

Equalization  of  Bates.  Interstate  Commerce  Commission  has  no   jurisdic- 
tion  over,    399 

through  various  ports,    328 

purpose  of,  to  permit  carriers  and  ports  to  compete  for  traffic, 328 

such  adjustment  deserves  serious  consideration,    328 


504  ATLANTIC   PORT   DIFFERENTIALS 

Erie  Canal,  transportation  rates  of,  affects  ditferences  in  ocean  rates,   ...  Sfi 

slower  method  of  transportation, 33 

cost  of  transportation  by  to  New  York  by, 31 

advantages  of,  to  New  York,   201 

volume  of  tonnage  to  New  York  by, 31 

cheaper  rates  by,  due  to  inferior  service,   39 

cheap  transportation  to  New  York  by,   31 

effect  of  cheaper  transportation  by,  on  average  cost  to  New  York, 31 

competition  with   railroads,    97 

transportation  of  grain  to  New  York,  ]\v,  225,  226 

falling  off  of  tonnage  of,  associated  with  decline  in  tonnage   to   New 

York, 333 

tonnage  of,  1886, 124 

early  competition  of  railways  with,    383,  4'35 

relative  importance  of  tonnage  on  and  railways,  1876,  435 

diversion  of  commerce  from,  to  railroads,   .  .    436 

tlirough  and  loeal  traffic  of,    437 

projects  of  Boston  to  meet  competition  of,   129 

important  bearing  of,  on  Differential  Rates,    332 

formerly  important  factor  in  grain  rate  situation,   369 

Erie  Canax,  and  Hudson  Eiver  fixed  rate  on  grain  from  Chicago  to  sea- 
board,     ., 362 

Erie  Railroad,  cost  of  moving  freight  on,  1880-1881, 84 

Ex-lake  Differentials,  described  and  stated, 162 

reasons  for, 336 

on  grain,  history  of, 320,  384 

cannot  be  determined  by  distance  alone, 396 

Ex-lake  Grain,  percentages  of,  received  at  ports  1892-1903  (6  mos.), 322 

Ex-lake  Rates,  meaning  of  term, , 360 

highly    competitive,     321 

demoralized  in  1904, 286 

non-maintenance  of  in  1904, 286 

low  in  1904, 2.^6 

recommended    (1905),    3  41 

on  grain  of  4  cents  recommended  but  not  prescribed, 374 

on  grain,  includes  lighterage, 372,  373 

on  grain,  includes  cost  of  elevation  at  Buffalo,   372 

amounts  of  1889-1911,   3o8 

domestic, 360,  et  seq. 

for  export,    367 

stated  in  bushels;    local  rates  in  per  hundred  pounds,    365 

attacked  in  3  911  in  Board  of  Trade,  etc.  v.  A.  C.  E.  Co.,  and  N.  Y.  Prod. 

Ex.  V.  N.  Y.  C.  &  H.  R.  Co., 359 

short  line  distances  Buffalo  to  ports,   395 

of  prime  importance  in  movement  of  grain  at  eastern  lake  ports, 383 

also  see  ' '  Rates,  ex-lake. ' ' 

Exports,  variation  in,  by  ports  obeys  no  law, 222 

relative  amount  of  cargo  and  berth  business  unknown,  174 

of  Canadian  breadstuffs,  in  bond,  volume  of, 393 

an  important  factor  in  regulating  freight  charges,  98 

increase  in,  naturally  leads  to  increase  in  imports, 449 


INDEX  505 

Export  and  Domestjc  Grain  Rates,  difference  in  1911,  3  cents, 374 

Exports  and  Imports,  changes  in  volume  of,  at  New  York, 217 

PLvpoRT  and  Import  Bates,  view  of  Interstate  Commerce   rounnission   re- 
specting, changed  by  Supreme  Court   in  Texas  &  Pacific   R.  Co.  v. 

Interstate  Commerce  Comiiiii-hion  (162  U.  S.  197),   238 

Export  and  Import  Traffic,  controversy  in  190-4  early  narrowed  to  ques- 
tions of, 286,  293 

Export  Grain,  method  of  doing,  176,  297 

moves  largely  via  Great  Lakes,    367 

in  1872  contributed  40%  of  tctal  shipped  into  Atlantic  states,   438 

in  bushels  and  per  cents,  by  ports,  1878,  1903,   333 

percentage  of,  by  different  ports,  1882,  1895,  1896,   219 

Export  Rates,  in  their  essence  inland  division  of  a  through  rate,.  .  .  .240,  242,  328 

legality  of, 242 

less  than  domestic,  not  unjust  discrimination, 241 

less  than  domestic,  decision  respecting  in  N.  Y.  Prod.  Ex.  v.  N.  Y.  C.  & 

H.  R.   (3  I.  C.  C.  138) ,   237 

lower  than  domestic  on  grain  to  ports,  stated,   399 

through  Boston  since  1870  same  as  New  York,   234 

at  Boston,  less  than  domestic,   118 

on    grain    and   provisions   to    Boston    may    properly    be    less    than    on 

domestic,   107 

at  Boston  may  be  less  than  domestic  under  Differential  Agreement,  and 
such    arrangement    since    approved    by    the    Interstate    Commerce 

Commission,    327 

Export  Traffic,  distribution  of,  to  ports,  purpose  of  differentials,   208 

competitive  and   hence   rates   ought   be   adjusted    so   rival   routes   can 

compete  for  it,  327 

Facilities  at  New  York, 296,  297 

Findings  of  Advisory  Commission  summarized  by   Interstate   Commerce 

Commission,    133 

Fink,  Report  of,  reference  to, xvi,  288 

Report  on  Adjustment  of  Transportation  Rates  to  Seaboard, 5,  et  scq. 

General  Conclusions  on  adjustment  of  rates  to  seaboard,   39 

representative  of  carriers  before  Advisory  Commission,   71 

report   of,   characterized   as  ' '  most   luminous   discussion   of   the   entire 

subject  and  must  be  a  classic  to  every  one, "   288 

quoted  from,  that  ' '  ocean  competition  acts  at  least  in  a  great  measure 

as  an  equalizer  of  the  through  rates, "   396 

Fixed  Differences  in  rates  to  ports  provided  by  Differential  Rate  Agree- 
ment,      2 

based  on  prevailing  ocean  rates, 26 

Fixed  Principles  to  determine  proper  adjustment  of  rates  sought,  12 

Flour,  movement  of  by  lake  and  rail  on  through  bill  of  lading,   320 

parity  of  rates  on,  and  grain,   366 

percentages  of  export,  by  ports, 392,  393 

no  intent  to  change  differentials  on  in  1912, 411 

and  provisions  exported  by  berth  rate,   221 

grain  and  provisions,  classification  of  1888,   116 


50G  ATLANTIC   PORT   DIFFERENTIALS 

Foreign  Commerce,  foiifeiitratiou  of  at  New  York  favorable  as  furnishing 

compensating  freights, 86 

Freight  Rates,  inland  cannot  distinglli^•h  l)et\vcen  cr.rgo  and  Ijcrtli  lots,   .  .  211 

equal  to  all  the  i)orts  proposed  by  New  York  nierc-hants, 18  (note) 

Freight  Charges,  reductions  in,  due  to  competition,  t(jU 

Full   Cargo,   no  apprecialile   difference  in   ccst   or   o'.ean   rate  on,   at   three 

ports,   170 

Geographjcal  Location,  an  advantage  of  certain  railways  in, 440 

Crades  and  curvatures  on  New  York  Central  and  Penns-ylvania,   292;     of 

Boston  roads,  422 

Grain  most  important  brancli  of  through  tratiie, 435 

method  of  exporting,   168,  176,  £97 

inspection  of,  at  New  York,  a  possible  disadvantage,    205 

method  of  fixing  through  rates  for  cotton  inapplicable  for,   330 

brought  to  the  seaboard  other  than  by  rail,   30,  369 

traffic  in,  most  affected  by  differentials,    221 

tonnage  of,  changes  in  not  connected  with  differentials, 100 

differentials  on,  reduced  in  February,  1899, 290,  326 

through  rates  to  Liverpool  via  various  ports,  1876,   441 

diversion  of,  from  New  York,  1876,  due  to  corn  alone,  452 

shipment  of,  in  bulk,  brought  about  economies,    .  . . 457 

.    cost  of  delivering  at  each  port  to  vessel  from  terminus  the  same, 2 

cost  of  delivering  into  hold  of  vessel  at  New  York  and  Baltimore,   ....  3.i9 

traffic  in,  influenced  by  storage  capacity  of  private  warehouses, 18 

amount  of,  shipped  to  particular  port  depends  largely  on  available  sup- 
ply of  tonnage  thereat, 440 

movement  of,  by  lake,  and  rail,  not  on  through  Ijill  of  lading, 320 

ex-lake    rates    on,    of    prime    importance    in    movement    of,    at    eastern 

lake  ports, 383 

competition  for  traffic  in,  by  railroads  began  1891, 383 

large  quantities  grown  tributary  to  Philadelphia  and  Baltimore 389 

amount  of,  received  and  exported  alt  various  ports,  1876, 443 

exports  of,  by  ports  and  percentages,  1S78,  1903,   333 

amount  received  at  five  Atlantic  ports,   1886,  percentages  of  and   per- 
centages exported,    ]  ;:3 

received  at  New  York  and  Boston,  1886,   129 

exports  of,  quantity  exported  by  New  York  and  Montreal  1902-1910  and 

percentage,   370 

exports  of,  percentage  of  totals  by  ports,  1902-1910, 370 

percentages  of  exports  of,  by  ports,  392 

Gra:n  and  Flour,  receipts  at  five  Atlantic  ports,  1886,   122 

Grain  Rates,  are  competitive, 362 

amount  of  from  west  to  east, 360 

Erie  Canal  important  factor  in, 339 

difference  between  export  and  domestic  in  1911,  3  cents,   374 

Grmn  Trade  is  part  of  the  whole,  not  an  independent  branch  of  commerce,  441 

Great  Lakes  export  grain  moves  largely  via,   367 

Harbor  Improvements,  expenditures  by  Federal  Government  in, 395 

Hepburn  Committee,  excerpts  from  testimony  before,   x 


INDEX  507 

History  op  Differentials  to  1S9S,  1()2 ;    to  1904,  287,  ct  scq. 

History  of  Ex-Lake  Dil^FERENTiAr.s,  320,  384 

History  of  Minimum  Freicht  Agreement, 294,  et  seq.;  397 

Inland  Rates,  average  to  ports,  1880,  31 

Import  Rates,  decision  res]ectiiig  in  N.  Y.  B.  of  T.,  etc.,  v.  P.  K.  K.  (4  I.  C 

C.  447), 237 

Imports,  great  bulk  of,  land  at  New  York,   169 

percentage  of,  through  four  ports,  1909-1911, 392 

percentage  of,  by  ports,  to  differential  territory,  392 

percentage  of,  destined  to  Trunk  Line  Tcrnuni  and  beyond,   393 

Import  and  Export  Rates,  legality  of, 242 

view  of  Interstate  Commerce  Commission   respecting,  changed   by   Su- 
preme  Court   in   Texas  &   Pacific   R.   Co.   v.    Interstate   Commerce 

Commission   (162  U.  S.   197),    238 

iMPi  RT  Rates,  all-rail  and  lake-and-rail  from  ports,  1908-1912 406 

from  Boston,  lower  than  from  New"  York  alleged  to  be  discriminatory 

against  latter,    422 

reductions  in  at  Boston,  1909, 406 

submission  concerning,.  1910,   406 

differentials  recommended,  1912,   407 

Inspection  of  Grain  at  New  York,  a  possible  disadvantage,   205 

Insurance,  marine,  as  an  element  in  determining  adjustment  of  rates,   ...  43 

cost  of,  from  Baltimore  and  Philadelphia  more  than  Boston, 323 

Interstate  Commerce  Commission,  no  jurisdiction  to  fix  differentials,...  337 

has  no  jurisdiction  to  equalize  rates,  399 

characterization  by,   of   Fink's  Report   as   "Most   luminous   discussion 

of  the  entire  subject  and  must  be  a  classic  to  everyone. " 288 

resume  of  Advisory  Conunission  's  Report  by,   289 

does  not  recognize  as  lawful  Differential  Rate  Agreement, 401,  425 

relation  of,  to  Differential  Rates,  1898,   206,  207 

function  of  in   1898  controversy, 324 

relation  of  to  1905  controversy, 324 

general  investigation  by  in  1904, 286 

consented  in  1912  to  act  as  arbitrators,  245;    but  could  not  make  an 
adjustment  contrary  to  that  made  in  discharge  of  duties  under  the 
law,  ibid. 
decisions  of,  see  Table  of  Cases  Reported,  p.  487. 

Iron  and  Steel,  differentials  on,  reduced,   290,  326 

no  intent  to  change  differentials  on  in  1912,   .  .  .  .■ 411 

Joint  Traffic  Association,  rates  maintained  by, 210 

legality  or  propriety  of,  not  considered  in  1898  proceeding,   230 

Lake  and  Canal  Rates  lower  than  all-rail,   119 

Legality  of  export  and  domestic  rates  of  different  amounts  to  Boston  in 

1898  not  considered,  161 

Lighterage,  deduction  of,  before  pro-rating  caused  difference  in  divisions,.  121 

cannot  be  considered  separate  from  through  rate,   154 

at  New  York  as  element  of  cost,   292 

cost  of  urged  as  justification  of  grain  diffe'-ential,   168 


508  ATLANTIC   PORT   DIFFERENTIALS 

JjIGUTERAGE — CO)ltiHUecL 

and  teriiiiiial  services  at  New  York  referred  to, 167 

c'liarges  to  New  York  and  East  Boston,   147 

charges  at  New  York  irrelevant  to  question  cf  reasonablenei-s  of  rates 

to  Boston, 128 

charges,  none  at  Boston,  1888,   118 

and  wharfage  charges  part  of  through  rate, 120 

and  wharfage  charges  at  Bobton,   1888,   ]  19 

loss  in  performing  by  Baltimore  &  Ohio  at  New  York,   386 

included  in  ex-lake  grain  rates, 372,  37  3 

Load-line,  advantages  in  respect  to,  at  southerly  ports,   169 

Local  Traffic,  exceedingly  diverse  in  character  between  roads,  85 

but  little  affected  by  competition  of  rival  trunk  lines  or  of  cities, 437 

difficulties  in  distinguishing  between  and  "competitive,"    439 

chief  source  of  revenue, 460 

Local  and  Through  Traffic,  distinction  between,  must  be  kept  in  mind 

when  considering  competition  between  carriers  to  ports, 436 

Location  of  Philadelphia  and  Baltimore  pcrsi&tent.y  urged,  326,  381 

Long  Haul,  railroads  desire,  390 

railroads  have  right  to  ^jroteet, 401 

Maintenance  of  Diiferentials  doubtful,  199 ;    better  alter  organization 

of  Joint  Traffic  Association, Itg 

Maintenance  of  Rates,  differential  adjustment  not  alwa.>s  adhered  to,  .  .  .  391 

Maintenance  of  ex-lake  rates,  368 

Merchants  and  communities,  interest  of,  in  relation  uf  rates,   .  .  . '.9 

Merchants  of  New  York  and  Boston  compete  in  New  England, 121 

Mileages,  for  purpose  of  certain  divisions,  116 

constructive,  sometimes  used  as  basis  for  couiputing  percentage  in  Per- 
centage  System,    151 

to  Boston,  1888,    115 

^Mileage,  see  "Distance." 

2*IiNiMUM  Freight  Agreement,  history  of,  £94,  ei  seq.;   397,  et  seq.;   effect 

of, 296 

equal  through  rates  via  all  ports  during, 330 

Montreal,  export  and  import  traffic  increasing  in  recent  years, 383 

all-water  grain  moves  to,   369 

claim  of  New  York  of  grain  going  to, -369 

advantages  of,  compared  with  New  York,  371 

grain  exports  of,  compared  with  New  York,  370 

New  Orleans,  harbor  facilities  at,  218 

Newport  News  and  Norfolk,  not  included  in  differentia]  agreement, 383 

growth  of,  in  exports,    218 

and  Norfolk,  established  policy  of  carriers  to  make  Baltimore  rates  to 

and  from,   424 

New   York  before   Advisory   Commission   rejected   distance   principle   and 

favored  cost  of  service,   80 

vast  importance  of,   90 

great  bulk  of  imports  land  at,   169 

advantages  of,  30,  133,  171,  200,  387 


INDEX  509 

Neav  York — Continued. 

advantages  of,  cannot  be  fixed  ])reti?ely  in  (nnrency,    H9 

steamer  advantages  at,    170 

advantages  of,  eonipared  with  IMontreal, 371 

advantages  of  Erie  Canal  to,   201 

might  be  ruined  by  strict  application   of  cost   principle  to   trtuisporta- 

tion    rates 90 

claim  of,  concerning  cost  of  moving  freight,   80 

views  on  differentials  expressed  to  Advisory  Commission, 74 

cheap  transportation  of  grain  to,  by  Erie  Canal, ;^1 

effect  of  cheaper  transportation  to,  by  Erie  Canal,  on  average  cost,   ...  31 

less  import  rates  at  Boston  ssid  to  be  harmful  to, 427 

high  class  tonnage  moves  through,   39fi 

option  market  at,  claimed  as  advantage,  but  denied,   39;") 

traffic  alleged  to  be  diverted  from,  by  differentials, 297 

Pennsylvania  Eailroad  might  for  competitive  reasons  haul  to,  at  Balli- 

•  more  rates,  but  it  conld  not  with  justice  be  compelled  so  to  do 327 

reduction  of  differentials  to,  takes  a.way  Baltimore 's  advantages 328 

decline  in  tonnage  to,  associated  with  falling  off  of  canal  traffic, 333 

its  contentions  in  respect  to  differentials,  1898 164 

argued  in  1898  cost  of  service  conld  not  justify  differentials 16G 

claim  of,  in  1898  of  increasing  burden  of  differentials, 177 

contentions  of  in  1898 210 

cannot  determine  wliat  differentials  would  offset  advantages  of,   213 

changes  in  exports  and  imports  through,    217 

competitive  factors  at.  very  strong, 14S 

rates  to,  fixed  by  sharp  competition,    149 

reasons  for  tardiness  in  providing  termiisal  facilitirs  at,    4:")7 

lighterage  charges  at 14  7 

lighterage  at,  as  element  of  cof-t,   292 

dockage  and  port  charges  greater  at  than  Boston,  174, 

port  charges  at,  higher  than  at  Baltimore  and  Philadelphia 169 

lighterage  and  terminal  services   at 167 

facilities  at,    296,  297 

cost  of  transfer  of  traffic  at,  greater  than  at  Boston 38S 

cost  of  delivering  grain  into  hold  of  ve?sel  at 399 

terminal  costs  at,  said  to  be  greater  than  at  Boston, 42.") 

improvements  in  terminal  facilities  at 17 

drayage   charges    at,    422 

diversion  of  grain  from,  1873-1876,  due  to  export  trade  not  local  con- 
sumption,       449 

diversion  of  grain  from   1876,  due  to  cnm   alone 452 

transportation  of  grain  to,  by  Erie  Canal 22n,  226 

losing  grain  trade,    225 

grain  exports  of,  compared  with  Montreal, 370 

claim  of,  that  grain  is  going  to  Montreal 369 

railroads  to,  have  policy  of  making  rail  rates  sufficiently  above  canal 

rates  to  secure  reasonable  remuneration,   38 

import  rates  same  from  Boston  as, 417 

import  rates  from  Boston  less  than  from  New  York,  alleged  to  be  dis- 
criminatory  against    latter,    422 


510  ATLANTIC    PORT   DIFFERENTIALS 

New  York — Continued. 

rates  to,  in  1888  from  various  western  cities, 122 

and  Boston,  grain  received  at,  1886,   129 

earnings  on  ear  load  shipments  to,   120 

car  earnings  on  certain  traffic  to,   117,  148 

foreign  conimerce  of  the  port  of,  1886, 1^3 

equality  of  rates  to  Boston  rot  supported  by  several  important  elements,  126 

and  Boston  merchants  compete  in  New  England,  121 

lower  ocean  rates  to,  than  to  ' '  outports.  "    397 

reasonable  to  expect  lower  ocean  rates  than  at   Baltimore  and   Phila- 
delphia,   25 

ocean  rates  at,  less  than  at  Baltimore, 36 

has  during  closed  navigation  less  ocean  rates  than  Boston, 423 

mileage  to,  1888,    116 

rates  of,  made  to  Boston  as  a  concession,   13U 

Nkvv'  York  Central  Eajlroad,  grades  and  curvatures  on, 292 

cost  of  moving  freight  on,  1880-1881,  '.  .  84 

New  Y'ork  Eailroads,  offer  of,  to  carry  thereto  at  Baltimore  rates, 385 

No  Preference  Clause  ox  Constitution,  inapplicable  to  freight  rates, 385 

Non-competitive  Points  furnish  considerable  traffic, 20 

Ocean  Carriage  does  not  differ  materially  at  Baltimore  and  Philadelphia,.  .  212 

exact  relative  cost  of,  from  ports  impossible,   2Jli 

Ocean  Competition  "Acts  at   least  in  great  measure   as  an   equalizer   of 

through  rates, ' '  Fink,   396 

Ocean  Eates,  reductions  in,  as  ground  for  withdrawal  from  Differential  Bate 

Agreement  by  New  York  Central,   1880,    10 

fluctuations  .in,    41,  170 

not   stable, 394 

result  of  free  competition, ,, 330 

•         average  of,  misleading,   41 

changes  in,   24,  213 

lower  in  winter  than  in  summer,   36 

increase  with  decline  in  canal  and  lake  rates,    33 

adjust  themselves  to  inland  rates,    33 

quotations  of,  apply  to  only  small  part  of  business,   28 

cannot  be  predicted,   24,  27,  41 

average  from  ports,  1877-1880,   27 

reasonable    to   expect    higher    at    Baltimore    and    Philadelphia    than    at 

New  York,    25 

less  at  New  York  than  at  Baltimore,   36 

in  1881  greater  from  Baltimore  than  from  New  York,   99 

from  Boston  and  New  York  not  materially  different,     107 

from   New  York   during   season   of   closed   navigation   less   than   from 

Boston,    423 

testimon}'  that  they  are  lower  to  "out-porls"  than  to  New  York, 397 

have  important  bearing  on  inland  rates,   98 

fluctuations  in,  said  to  accommodate  steamship  companies 388 

relative,  basis  of  Differential  Agreement,   394 

for  full  cargos  same  from  four  ports,   297.  394 

not  carried  in  tariffs,  in  sense  that  they  could  be  maintained, 394 


INDEX  51 1 

Ocean  Rates — Continued. 

impossibility  of  detennining  acem-ately,   -93 

variation  in,  alleged  to  be  canseil  by  inland  differentials,   294 

difference  in  between  ports,  always  exceeded  by  differentials,   329 

variation  in  between  ports,  1897-1905,   294 

relative  from  the  four  ports 171 

quotations  not  reliable,    173 

no  difference  as  between  ports  on  cargo  lots,  but  is  on  berth  lots 211 

difference  in,  berth  lots,  between  the  ports,   173 

berth  rate  less  stable  than  cargo  rates,    212 

flour  and  provisions  exported  at  berth  rates,   221 

Ocean  Shipment,  method  of  making  cargo  and  berth  shipment  of  grain,.  .168,  170 

Ocean  T'ariffs,  none  in  sense  that  rates  could  be  maintained,   394 

Ocean   Tonnage,  available  supply  of,  at  ports,  affects  shipment  of  grain 

thereto,    440 

Option  Market,  claimed  as  a  New  York  advantage,  but  denied, 395 

Origin,  points  of,  as  sources  of  traffic, 19 

"Out-ports,"  North  Atlantic  port's  other  than  New  York,   171 

lower  ocean  rates  at;  than  to  New  York, 397 

Passenger  and  Emjgrant  business  a  facor  in  distribution  of  traffic, 19 

Pennsylvania  Railroad,  extension  of,   16 

claim  of,  that  rates  be  adjusted  in  accordance  with  length  of  comjieting 

routes 40 

not  a  road  of  a  particular  city, 76 

cost  of  moving  freight  on;  1880-1881 84 

burden  of  defence  in  1912  controversy  by, 381 

grades  and  curvatures  on, 292 

might  for  competitive  reasons  haul  to  New  York  at  Baltimore  rates,  but 

could  not  with  justice  be  compelled  to  do,   327 

Percentage  Differences  in  rates  to  ports,  abolished  by  Differential  Rate 

agreement,    2 

Percentages  of  Traffic  at  seaboard,  26 

carried  by  Trunk  Lines,    16 

Percentage  Basis  of  Rates  recommended  for  Boston,  152;    substantially 

adopted,    .  .• 236 

Percentage  of  Exports  at  New  York,  change  in 206 

Percentage  Map,  connection  between  and  port  differentials,   ix 

Percentage  System,  referred  to,  151,  161,  32-J 

constructive  mileage  sometimes  used  in,  151 

applicable  to  and  from  Differential  Territory,    385 

connected  with  Differentials,  345  (note) 

described,  346,  et  seq.;    illustrated, ' 348,  353 

revisions  of,  to  Saginaw,  351 ;    Detroit  and  Toledo,   354 

Per  Ton  Per  Mile,  averages  various  carriers,  1868-1876,  460 

Philadelphia,  differences  in  rates  under  New  York 3 

difference  in  rates  to,  1875,   .9 

difference  in  rates  to,  under  Differential  Rate  Agreement,   _  10 

views  on  differential  rates  expressed  to  Advisory  Commission 74 

contentions  in  respect  to  differentials,  1898,  164 

claim  of,  concerning  cost  of  moving  freight  thereto,    84 


512  ATLANTIC   PORT   DIFFERENTIALS 

Philadelphia — Continued. 

location  of,  persistently  urged,   326,  381 

large  quantities  of  grain  grown  in  territory  tributary  to,    389 

differentials  at,  1905,   290 

elevation  charges  less  than  at  Boston,    322 

insurance  at,  as  an  element,  323 

disadvantage  of  water  to, Ifif*,  327 

reasonable  to  expect  higher  ocean  rates  than  New  York,   25 

ocean  rates  at,  do  not  materially  differ  from  Baltimore, 212 

Ph]ladelphl\  and  Baltijicre,  competitive  conditions  at.  created  by  Penn- 
sylvania and  Baltimore  &  Ohio,    400 

less  rates  to,  than  to  New  York  and  available  ocean  tonnage  at  causeil 

diversion  of  corn  trade,   453 

urge  distance  to  western  points, 214 

port  charges  at,  less  than  at  New  York, 16.) 

heavy  class  of  traffic  hauled  through,   396 

Policy,  questions  of,  all  ports  should  be  kept  open,  325 

Port  Differentials,  see  ' '  Differentials. ' ' 

Port  Preference  Clause  of  Constitution  inapplicable  to  freight  rates,  ....  385 

Poet  CHAfeGES,  less  at  Boston  than  New  York, 174 

higher  at  New  York  than  Philadelphia  or  Baltimore,  1C9 

Ports,  early  differences  in  rates  between,    xiv 

interests  of,  and  carriers  not  identical,   xviii 

interest  of  Trunk  Lines  at  variance  with  interests  of, 446 

prosperity  of,  involved  in  adjustment  of  rates,    73 

service  of  carriers  to  all,  where  possible, 390 

assumed  burden  of  conducting  1904  proceedings,    286 

should  each  be  kept  open, 325 

Ports  op  Call,  installation  of,  by  certain  steamship  lines,  3!'  9 

Practice  of  Carriers  in  making  assurances  of  rates  during  rate  wars,   ...  21 

Preference  in  Bates  may  be  excused  by  carrier  competition, 208 

Principles  of  correct  adjustment  of  rates,  24 

Principle  of  Differentials  legitimate,  228 

Proportional  x?ates  to  Boston,  if  based  on  distance  alone,   127 

Pro-rate  Principle,  see  Distances,  relative. 

Quotations  on  ocean  rates  for  small  part  of  total  traffic  should  not  measure 

all  traffic,   29 

Railroads,   public    agencies, 89 

powers  are  gttasi-govemmental 89 

chief  public  duty  to  make  reasonable  rates,    94 

no  business  of,  to  equalize  inequalities,   12.5 

no  duty  of,  to  equalize  conditions, 389 

latitude  allowed  to,  in  recognizing  competitive  conditions 227 

difficult  "questions  between  them  on  hypothesis  that  New  York  roi'ds  can 

compete   with   canal  rates 38 

advantage  in  offering  to  patrons  outlet  to  all  ports, 77 

obligations  of  to  the  several  Atlantic  ports, 74 

a  single  class  interested  in  adjustment  of  rates,   73 

problem  of  1876  arises  out  of  difficulties  of  competition,   458 


INDEX  513 

Eailroads — Continued. 

problems  of  change  rapidly 102 

routes  of,  to  various  ports,   389 

list  of,  sending  Atlantic  ports,  1876, 436 

list  of,  serving  Boston,  1888,   115 

right  of,  to  ])rotet't  long  haul 401 

effect  on  revenue  of,  if  rates  to  New  York  reduced, 206 

interests  of,  in  determining  rates  nuist  be  considered,   209 

non-participation  of,  in  1898  controversy,   210 

agents  of,  bid  against  each  other  for  traffic  during  rate  \vars, 437 

location  of  competing,  a  factor  in  distribution  of  traffic,    19 

geographical  location  of,  an  advantage,  440 

control  of,  over  through  rates  gradually  becoming  weaker,  in  1876,   .  . .  461 

early  competition  of,  with  Erie  Canal, 435 

relative  importance  of  tonnage  on,  and  Erie  Canal,  1876,   435 

carrying  capacity  of,  to  seaboard  limited  by  demands  in  west  and  at 

Atlantic    terminals,    442 

carrying  capacity  of,  influenced  by  storage  capacity,    18 

competition  of,  may  excuse  giving  preference,   2(18 

competition  of  water  carriers  with,    97 

wars   of,   expensive,    H 

wars  affect  companies  and  investors,   11 

wars   cause    difference  between   just   compensation   and   what    carriers 

actually  receive,    11 

wars  result  from  no  agreement  in  respect  to  rates,   11 

purpose  of  relative  rates  by,  to  give  each  fair  share  of  traffic  but  not 

unjustly  discriminate  between  communitfes,   11 

Bail  Proportion  of  Through  Eates  not  far  different  from  those  based  on 

pro  rata  principle,    23 

Bate  Agreement,  Differential,  adopted,  1877,  10 

Bates,  basis  of,  in  Trunk  Line,  Central  Freight  Association  and  New  Eng- 
land territories,   463 

early  differences  in  to  ports,   xiv 

low  rail  to  Atlantic  ports,  beginning  of,    ix 

relation  of,  between  Atlantic  ports  important,   ix 

difficulty  of  determining  relation  of,  as  between  ports,   xviii 

adjustment  of,  to  seaboard,  report  on,  by  Fink, 5,  et  seq. 

relative,  principles  to  determine  proper  adjustment  of  sought, 12 

proportion  of,  for  rail  transportation  to  be  not  less  than  local, 3 

differences  under  New  York  to  Philadelphia,   3 

differences  under,  to  Baltimore,  3 

to  Boston,  to  be  not  less  than  to  New  York, 2 

differences  in,   1869,    9 

differences  in,  1875,  to  Philadelphia  and  Baltimore,   9 

changes  in,  to  seaboard  preceding  1876,  recited,   9,  ct  seq. 

differences  in,  to  Philadelphia  and  Baltimore  under  Differential  Bate 

Agreement,   10 

fixed  differences  in,  abandoned   1876,    9 

relative  (percentage)  differences  in,  adopted,  1876,   9 

proper  and  equitable  adjustment  of,  fraught  with  difficulties  and  com- 
plications,       11 

33 


514  ATLANTIC   PORT   DIFFERENTIALS 

Rates — Continued. 

concessions  in,  to  Xew  York  and  other  cities,  1880, 14 

agreement  in  respect  to,  necessary,  11 

reductions  in  ocean,  as  ground  for  withdrawal  from  Differential  Rate 

Agreement,  1880,  by  New  York  Central,   10 

equality  of,  to  all  the  ports  claimed  as  just  by  Now  York  Central,  1880,  11 
change  in  equalization  of,  as  ground  for  withdrawing  from  Differential 

Rate  Agreement,  1880,  by  New  York  Central,    10 

actually  charged,  difficult  to  obtain,   14 

no  attempt  to  maintain  in  1878-1879,   14 

non-maintenance  of,  claimed  by  New  York  Central,  1880, 14 

adjustment  of  a  question  of  national  importance,    12 

result  of  adjustment  prior  to  1880,  described,   12,  et  seq. 

adjustment  of,  has  no  practical  bearing  when  railroad  capacity  is  fully 

taJted,     15 

arbitrary  adjustment  of  cannot  be  maintaiu'^d  for  any  length  of  time,  17 
adjustment  of,   difficulty  arises  because  carriers  handle  both   domestic 

and   through    traffic,    24 

adjustment  of,  marine  insurance  as  an  element  in  considering, 43 

proper  adjustment  of,  a  question  of  national  concern,  74 

proper  adjustment  that  which  does  not  interfere  with  natural  distribu- 
tion  - 18 

adjustment  of,  general  principles  involved,   23 

adjustment  of,  complex  and  intricate, 43 

lowest  through,  establishes  rates  for  all  regardless  of  distance, 40 

adjustment  of,  on  basis  length  of  competing  routes,  claim  of  Baltimore 

&  Ohio  and  Pennsylvania, 40 

adjustment  of,  must  be  such  as  to  meet  combined  influence  of  rril  and 

water  transportation  at  New  York,   39 

fixed  differences  in,  based  on  preA'ailing  ocean  rates  recognized  in  Dif- 
ferential   Rate   Agreement,    26 

of  Trunk  Lines  must  be  determined  ■with  regard  to  competition  in  export 

trade,     23 

rail  proportion  of,  not  far  different  than  under  pro  rata  principle, 23 

inland,  must  be  made  more  in  view  export  than  domestic  trade 26 

based  on  relative  distances, 23 

via  competing  routes  must  be  same  for  same  service, 23 

do  not  determine  amount  of  ti-affic  from  non-competing  points 20 

reduction  of   New   York,   to   Philadelphia   and  Baltimore   basis   woiShl 

invite  business  to  latter  cities,    78 

accustomed  higher,  to  Boston  and  New  York  than  to  Philadelphia  and 

Baltimore,     73 

should  not  be  determined  arbitrarily,   102 

must  be  relatively  reasonable,   155 

by  lake  and  canal  lower  than  by  rail, 119 

"arbitrary"  of  no  alarming  significance,  131;    but  see  dissenting  opin- 
ion in  Boston  C.  C.  v.  L.  S.  &  M.  S., 134 

large  volume  of  traffic  can  be  profitably  conducted  at  relatively  small,.  .  127 

cost  of  service  not  sole  or  most  important  factor,   127 

in  reasonableness  of,  cost  of  lighterage  at  New  York,  not  relevant 126 

concessions  in  to  New  York, 35 


INDEX 


515 


Rates — Continued. 

throuiih  must  be  cousiclered  as  a  unit,  the  divisions  being  unimportant,.  .  126 

on  grain  by  lake  and  canal,  188/ -•-•■* 

low,  volume  of  traffic  as  infiueuce  in  sectoring, 38G 

carriers  have  right  to  make  such  rates  as  see  fit  to  Boston,  but  must  not 

unduly  burden  other  traffic,    400 

grain  from  Chicago,  fixed  by  Erie  Canal  and  Hudson  River,   362 

parity  of,  on  flour  and  gi-ain, 366 

on  grain,  flour  and  provisions,  1898,  tc  ports,   K"! 

better  maintenance  of,  after  organization  of  Joint  Traffic  Association,.  .  IW) 

reductions  in,  effect  on  revenue  of  carriers, 206 

in  determining,  interest  of  carriers  must  be  cou,sidered,  209 

difference  between  export  and  domestic  grain,  1911,  3  cents,   374 

maintenance  of,    '^-  '  "^ 

maintained  through  Joint   Traffic  Association,    210 

rail,  changes  in,    -^"^ 

differential,  perhaps  not  maintained  to  1896,  220 

l)asis  for  computing,  short  line  mileages, 1->1 

on  grain  to  various  points,    !•'- 

combinations  on  Buffalo  on  grain  less  than  on  Detroit  and  Toledo,  1892,  153 

must  be  agreement  in  respect  to,  for  competitive  traffic,   439 

determined  not  by  the  strongest  but  by  the  weakest  lines. 4G1 

sudden  changes  in,  should  not  be  allowed 462 

non-observance   of,   because   of   competition,    42 

equal  inland,  must  exist,  if  equalization  of  cost  to  be  had,  1'6 

maintained  in  1880,   ^4 

equal  through,   objectionable  to  carriers,    25 

average  through,  year  1880,    3.. 

equal  through,  difficulties  of  under  domestic  bills  of  lading, 26 

equal  through,  under  through  bills  of  lading  attempted,  1876, 24 

equal  through,  protests  by  Chambers  of  Commerce  against, 25 

average  through,  period  of  canal  navigation,  1880,  32 

ocean,  adjust  themselves  to  inland  rates,  33 

reductions  in,  as  ground  for  withdrawal  from  Differential  Rate  Agree- 
ment in  1880,  by  New  York  Central, 10 

average  ocean,  during  closed  season,  1880,   32 

ocean,  quotations  of,  apply  only  on  small  part  of  business, 28 

average  1877-1880,   27 

reasonable  to   expect   higher   at   Baltimore   and   Philadelphia   than  ^ 

New  York,    25 

cannot  be  pre-determined 24,  27 

no  appreciable  difference  in  cost  of  full  cargo  sliii>ments  between 

the  ports,    I'O 

fluctuations  in  very  great, 1"0 

quotations  of,  not  reliable, 1 '  3 

difference  in  berth  lots  between  the  ports,   173 

relative  from  ports, 1 '  l 

no  difference  as  between  ports  on  cargo  lots  but  is  on  berth  lots,  .  .  211 

do  not  differ  materially  at  Baltimore  and  Philadelidiia,   212 

berth  less  stable  than  cargo,   •^'2 

see  "Ocean  Rates." 


516  ATLANTIC   PORT   DIFFERENTIALS 

Rates  from  Boston  westbound,  New  York  rate  in  1882,   117 

Rates  to  New  York  and  Boston,  1888,  from  Chicago,  116;    1892, 147,  151 

from  various  western  cities,  1888,  122 

divisions    of,    1892, .  . 147 

Rates  to  Boston,  complained  of  in  1888, 114 

on  export  grain  and  provisions  may  properly  be  less  tlian  on  domestic, .  107,  109 

over  New  York  are  arbitrary, 117 

Qxport  less  than  domestic, 118 

equal  to  New  York  as  a  concession,  130 

Rates,  amount  of,  statement  shoTjring  changes  in  rates  on  grain,  ex-lake 
domestic,  from  Buffalo,  N.  Y.,  to  Boston,  Mass.,  from  1896-1904, 
via  New  York  Central  and  Hudson  River  Railroad,   250 

Statement  showing  changes  in  rates  on  grain,  ex-lake,  for  export, 
from  Buffalo,  N.  Y.,  to  Boston,  Mass.,  from  1897-1904,  via  New 
York  Central  and  Hudson  River  Railroad,  251 

Statement  showing  changes  in  rates  on  grain,  ex-lake,  domestic,  from 
Buffalo,  N.  Y.,  to  New  York,  N.  Y.,  from  1894  to  November  29, 
1900,  via  New  York  Central  and  Hudson  River  Railroad 252 

Statement  showing  changes  in  rates  on  grain,  ex-lake,  domestic,  from 
Buffalo,  N.  Y.,  to  Philadelphia,  Pa.,  from  1894-1904,  via  New 
York  Central  and  Hudson  River  Railroad,   253 

Statement  showing  changes  in  rates  on  grain,  ex-lake,  for  export,  from 
Buffalo,  N.  Y.,  to  Philadelphia,  Pa.,  via  New  York  Central  and 
Hudson  River  Railroad,    254 

Statement  showing  changes  in  rates  on  grain,  ex-lake,  domestic,  from 
Buffalo,  N.  Y.,  to  Baltim'ore,  Md.,  from  1894  to  November  11,  1895, 
via  New  York  Central  and  Hudson  River  Railroad, 255 

Statement  showing  changes  in  rates  on  grain,  domestic,  from  Buffalo, 
N.  Y.,  to  Boston,  Mass.,  from  1896-1904,  via  Delaware,  Lacka- 
wanna and  Western  Railroad, 235 

Statement  showing  changes  in  rates  on  grain,  for  export,  from  Buffalo, 
to  Boston,  Mass.,  from  1896-1904,  via  Delaware,  Lackawanna  and 
Western  Railroad,  256 

Statement  showing  changes  in  rates  on  grain,  ex-lake,  domestic,  from 
Buffalo,  N.  Y.,  to  New  York,  N.  Y.,  from  1896-1904,  via  Delaware, 
Lackawanna  and  Western  Railroad, 2.36 

Statement  showing  changes  in  rates  on  grain,  ex-lake,  for  export,  from 
Buffalo,  N.  Y.,  to  New  York,  N.  Y.,  from  1896-1904,  via  Delaware, 
Lackawanna  and  Western  Railroad,   257 

Statement  showing  changes  in  rates  on  grain,  ex-lake,  domestic,  from 
Buffalo,  N.  Y.,  to  Philadelphia,  Pa.,  from  March  9,  1896-1904,  via 
Delaware,  Lackawanna  and  Western  Railroad,   258 

Statement  showing  changes  in  rates  on  grain,  ex-lake,  for  export,  from 
Buffalo,  N.  Y.,  to  Philadelphia,  Pa.,  from  1891-1904,  via  Delaware, 
Lackawanna  and  Western   Railroad,    258 

Statement   showing  changes  in  rates  on  grain,  ex-lake,   from  Buffalo, 

N.  Y.,  to  Boston,  Mass.,  via  Erie  Railroad,  259 

Statement  showing  changes  in  rates  on  grain,  ex-lake,  from   Buffalo, 

N.  Y.,  to  New  York,  N.  Y.,  via  Erie  Railroad,   260 

Statement  showing  changes  in  rates  on   grain,  ex-lake,  from   Buffalo, 

N.  Y.,  to  Philadelphia,  Pa.,  via  Erie  Railroad,  261 


INDEX  517 

Rates,  amount  of — Continued. 

Statement  showing  changes  in  rates  on  grain,  ex-lake,  from  Buffalo, 
N.  Y.,  to  Boston,  Mass.,  via  Erie  and  Western  Transportation 
Company   (Pennsylvania  Railroad  Comjjany),    263 

Statement  showing  changes  in  rates  on  grain,  ex-lake,  domestic,  from 
Buffalo,  N.  Y.,  to  New  York,  N.  Y.,  from  1889,  via  Erie  and 
Western  Transportation  Co.,    264 

Statement  showing  rates  on  grain,  ex-lake,  domestic  and  export,  from 
Buffalo,  N.  Y.,  to  Philadelphia,  Pa.,  from  1899-1904,  via  Western 
New  York  and  Pennsylvania  Railroad, 26;5 

Statement  showing  rates  on  grain,  ex-lake,  domestic  and  export,  from 
Buffalo,  N.  Y.,  to  Philadelphia,  Pa.,  from  1S99-1904,  via  Western 
New  York  and  Pennsylvania  Railroad,  265 

Statement  showing  changes  in  rates  on  ex-lake  grain,  for  domestic  use 
and  export,  from  Erie,  Pa.,  to  Boston,  Mass.,  via  Erie  and  Western 
Transportation  Company  (Pennsylvania  Railroad  Company), 267 

Statement  showing  changes  in  rates  on  grain,  ex-lake,  domestic,  from 
Erie,  Pa.,  to  Philadelphia,  Pa.,  via,  Erie  and  Western  Transporta- 
tion Company,   269 

Statement  showing  changes  in  rates  on  grain,  ex-lake,  domestic,  from 
Erie,  Pa.,  to  Baltimore,  Md.,  via  Erie  and  Western  Transportation 
Company,     271 

Statement  showing  changes  in  rates  on  grain,  ex-lake,  domestic  and 
export,  from  Fairport,  Ohio,  to  New  York,  N.  Y.,  via  Pittsburgh 
and  Western  Railroad, 273 

Statement  showing  changes  in  rates  on  grain,  ex-lake,  domestic,  from 
Fairport,  Ohio,  to  Philadelphia,  Pa.,  via  Pittsburgli  and  Western 
Railway  and  Baltimore  and  Ohio  Railroad, *.  .  . .        273 

Statement  showing  changes  in  rates  on  grain,  ex-lake,  domestic,  from 
Fairport,  Ohio,  to  Baltimore,  Md.,  via  Erie  and  Western  Trans- 
portation Company,  Pittsburgh  and  Western  Railway,  and  Balti- 
more and  Ohio  Railroad, 274 

Statement  showing  rates  on  grain,  ex-lake,  for  domestic  use,  from 
Buffalo,  N.  Y.,  to  Boston,  Mass  , 'and  New  York,  N.  Y. ;  also  dif- 
ference in  rates, 276 

Statement  showing  rates  on   grain,  ex-lake,  for  export,   from   Buffalo, 

N.  Y.,  to  Boston  and  Philadelphia;    also  difference  in  rates, 277 

Statement  showing  rates  on  grain,  ex-lake,  for  domestic  use,  from 
Buffalo,  N.  Y.,  to  New  York  and  Philadelphia;  also  dift'erence 
in  rates, 278 

Statement  showing  rates  on  grain,  ex-lake,  for  export,  from  Buffalo, 
N.  Y.,  to  New  York,  N.  Y.,  and  Philadelphia,  Pa.;  also  difference 
in   rates,    279 

Statement  showing  rates  on  grain,  ex-lake,  for  export,  from  Erie,  Pa., 

to  Philadelphia  and  New  York ;    also  difference  in  rates 280 

Statement    showing   rates   on    grain,    ex-lake,    for   domestic    use,    from 

Erie,  Pa.,  to  Philadelphia  and  Baltimore;    also  difference  in  rates,       281 
Rates,  Eastbound,  all-rail,  class,  382;    eastbound  lake  and  rail,  382;    ex- 
lake,    grain,    382 

Westbound,  all-rail,  class,   383 

Westbound,  lake  and  rail, 383 


518  ATLANTIC   PORT   DIFFERENTIALS 

Rates,  ex-lake,  differentials,  history  of 320 

demoralization  of,  in  1904,  286 

maintenance  of,    '^-^'  ^ob 

highly  competitive,    ^''^ 

in  1898,  ^^2 

RATE  War,  ill  1879,  14;    in  1882,  133;    1909,  -±06 

ineffectual  to  get  rid  of  differentials, 99 

differentials  as  a  means  of  averting, 386 

produced  by  differential  controversy,   324 

illustration  of  spread  of,  when  begun,  445 

agents  of  different  lines  bid  against  each  other  for  traffic,  during,  ....  437 

weakest  not  strongest  lines  have  advantage  in,    461 

unprofitable,  ^^ 

practice  of  carriers  in  making  rate  assurances  to  shippers, 21 

during,  traffic  obtained  under  competition,   14 

distribution  of  traffic,  not  influenced  by,    16 

due  to  efforts  of  carriers  to  protect  themselves  against  each  other, 460 

eff'ect  of,  is  general  reduction  in  revenue,    ••  •  •  16 

of  1876  produced  increased  receipts  at  Baltimore,   17 

Rate  per  ten  mile,  to  Boston,  1888, 124,  146 

Reasonable  Compensation  to  carriers  and  what  they  actually  get,  differ- 
ence between,  due  to  railroad  wars,   11 

Rebate  paid  on  Boston  traffic  to  equalize  rate  v/ith  New  York, 107,  109.  118 

Refund,  method  of  giving  New  York  rate  at  Boston,   235 

see  ' '  Rebate. ' ' 

Relation  of  Rates  to  Atlantic  ports,  1888,   119 

see  "Differential  Rates." 

Relatively  Reasonable,  rates  must  be, 155 

Res  Judicata,  none  in  respect  to  propriety  of  export  rates  less  than  domestic 

in  certain  proceedings,  236 

Re-shipping  Rate  on  grain  at  Chicago, 368 

Returns  per  ton  mile  for  various  carriers,  1868-1876, 460 

Return  Loads,  greater  at  New  York  than  at  other  ports, 87 

bespeak  lower  rates,   86 

should  receive  consideration,    86 

Revenue,  from  local  traffic,  is  chief  source  of  carriers'  income, 460 

reduction  in,  is  effect  of  rate  wars,  16 

Routes  of  Transportation  through  Chicago  to  New  I'ork,  1887, 123 

to  various  ports,   389 

of  grain  from  west  to  east, 360 

Shippers,  attaching  and  retaining,  as  causes  of  distribution  of  tonnage,   ...  21 

Short-line  Distance  should  be  used  as  basis  computation,  151 

Statistics:    Percentage  of  total  grain  receipts  1878-1880,  at  ports, 12 

Percentage  of  westbound  traffic  from  ports,  1878-1881, 13 

Percentage  of  total  tonnage  carried  by  four  Trunk  Lines,  1878-1880,  to 

ports,     13 

Grain  receipts  at  five  ports,  1865-1880, 16 

Statement  A.     Showing  the  total  number  of  bushels  of  grain  (including 
flour)  received  at  and  exported  from  the  four  Atlantic  ports,  during 

the  years,  1878,  1879,  1880,   44 


INDEX  519 

Statistics — Continued. 

Statemeut  B.  Showiug  the  relative  aniouiit  of  west  aud  eastbound  and 
export  tonnage  (under  tlirough  bills  of  lading),  of  all  classes,  of 
the  four  x\tlantic  cities,  during  the  certain  periods,   45 

Statement  C.     Statement  showing: 

1.  The  receipts  of  dead  freight   (in  classes)  and  cattle  and  hogs,  by 

the  four  trunk  roads,  at  New  York  City,  Boston,  Philadelphia 
aud  Baltimore  (eastbound). 

2.  The   ''exports"    (in    classes)    under   through   bills   of    lading,   via 

A'ew  York  City,  Boston,  Philadelphia  and  Baltimore  (east- 
bound). 

3.  The  7th  class  traffic  receijits  by  the  four  Trunk  Eoads,  and  exports 

according  to  Produce  Exchange  report  (eastbound). 

4.  The  imports  destined  to  trunk  line  termini  and  west  thereof,  arriv- 

ing at  New  York,  Boston,  Philadelphia  and  Baltimore  (west- 
bound ),    47 

Statement  U.  Total  receipts  and  exports  of  flour  and  grain  at  the  five 
Atlantic  cities,  New  York,  Philadelphia,  Baltimore,  Boston  and 
Montreal,  during  certain  ye:irs,  also  percentages  of  each  city  of 
total   receipts,    49 

Statement  E.  Tonnage  and  per  cent,  of  total  tonnage  from  each  point 
of  its  origin  from  the  west,  and  termini  of  the  four  trunk  roads, 
(N.  Y.  Central,  N.  Y.,  L.  E.  &  Western,  Pennsylvania,  Baltimore  & 
Ohio),  to  points  east  of  the  trunk  line  termini,  during  the  year 
ending  December  31,  1880,   50 

Statement  F.  Showing  the  distribution  and  per  cent,  of  total  tonnage 
to  each  destination  of  traffic  originating  at  the  four  Atlantic  cities 
and  eleven  interior  New  England  competing  points,  carried  to  the 
West  by  the  four  trunk  roads  (the  N.  Y.  Central,  N.  Y.,  L.  E.  & 
Western,  Pennsylvania,  and  Baltimore  &  Ohio).  Also  including 
traffic  carried  by  Central  Vermont  and  Grauk  Trunk  from  Boston 
and  New  England  competing  points, 52 

Statemeut  G.  Showing  average  quotations  of  ocean  rates  from  the  sea- 
board cities  to  Liverpool  by  steamers  and  back,  for  orders  by  sail- 
ing vessels,  during  the  years  1877  to  1880,  inclusive.  Compiled  from 
New  York  Produce  Exchange  reports,  average  quotation  reduced  to 
cents  per  100  lbs., 

Statement  H. 

1.  Quotations  of  rates  on  grain  via  lake  and  canal,  and  lake  and  rail 

from  Chicago  to  New  York  during  the  year  1880,  as  per  report 
of  Board  of  Trade  of  Chicago. 

2.  Average  ocean  rates  at  New  York  and  Baltimore,  for  each  of  the 

eleven  months  ending  November  30,  1881. 

3.  Estimate  of  average  ocean  rates  on  grain  exported  by  steam  and 

sail  from  New  York  and  Baltimore  from  January  1  to  November 

30,    1881,    50 

Statement  J.  Destination  of  ex^iort  corn  and  wheat  from  New  York 
aud  Baltimore  during  crop  year  ending  August  31,  1880,  and  from 

Philadelphia  during  calendar  year  ending  December  31,  1880, 58 

Statement  K.  Estimate  of  average  ocean  rates  on  grain  exported  by 
steam  and  sail  from  New  York,  Philadelphia  and  Baltimore,  during 


520  ATLANTIC   PORT   DIFFERENTIALS 

Statistics — Continued. 

the  year  and  during  the  periods  of  open  and  closed  navigation  of 

the  year  1880,    ^0 

Statement  L.  Estimate  of  average  rate  per  100  lbs.  for  transporting 
grain  to  and  through  New  York,  Philadelphia  and  Baltimore,  by  all 
routes   during  tho  year  1880,  also  during  open  navigation  of  same 

year,    • 62 

tonnage  received  at  and  forwarded  from  North  Atlantic  ports,  1880,  ...  87 

percentages  of  receipts  at  four  ports,  1878,  1879,  1880,  1881,  1882   (6 

mos.), ^"^ 

mileages  to  New  York  and  Boston,  1888, Ho,  116 

rates  from  New  York  and  Boston  to  Chicago,  1888,  116 

grain  and  flour  received  at  five  Atlantic  ports,  1886, 122 

grain  and  flour  receipts  at  New  York,  1886-1887,  122 

grain  received  at  five  Atlantic  ports,  1886,  percentages  of,  and  per- 
centages  exported,    123 

lake  and  canal  rates  on  grain,  1887, 123 

steamers  sailing  from  New  York,  1888, 123 

foreign  commerce  of  the  port  of  New  York,  1886, 123 

tonnage  of  Erie  Canal,  1886,  124 

grain  received  at  New  York  and  Boston,  1 886,  129 

rates,  Chicago  to  New  York  and  Boston,  by  classes,  1892, 147 

receipts  of  grain  and  flour  at  New  York,  1886-1887,   148 

rates,  Chicago  to  Boston,  1882, 151 

rates,  Chicago  to  New  York  and  Boston,  1892,   151 

grain  rates  to  various  points,   152 

rates  on  grain,  flour  and  provisions,  1878,  to  ]iorts,   161 

average  ocean  freights,  quoted  on  wheat  from  the  ports  to  Liverpool, 

for  the  non-canal  season,  1882-1896,  172 

annual  average  ocean  freights  quoted  on  wheat  from  the  ports  of  Liver- 
pool,   1882-1896,    173 

table  showing  the  relative  amount  of  berth  rate  and  cargo  exp)orts  for 

the  years  1895  and  1896  in  wheat  and  in  corn, 174 

full  cargos,  by  ports,  1893-1896,   175 

table  "showing  total  receipts  and  total  exports  of  flour,  wheat  and  corn 
in  bushels  at  New  York,  Boston,  Philadelphia,  Baltimore,  Norfolk 

and  Newport  News,  for  the  years  1873  to  189G  inclusive, 178 

table  showing  relative  proportions  of  the  total  receipts  of  flour  and  all 
kinds  of  grain,  including  oats,  rye,  and  barley,  in  bushels,  including 
receipts  of  wheat,  corn,  oats,  rye  and  barley,  at  the  four  named 

Atlantic  ports  for  years  1878  to  1896  inclusive, 179 

table  showing  relative  proportions  of  total  receipts  of  flour  and  all  kinds 
of  grain,  including  oats,  rye,  and  barley,  in  bushels,  including  re- 
ceipts of  wheat,  corn,  oats,  rye  and  barley,  at  the  six  Atlantic  ports 

for  years  1878  to  1896  inclusive, 180 

statement  showing  in  tons  the  dead  freight  forwarded  by  defendants  to 
points  named,  with  reference  to  flour,  grain,  and  mill  stuff,  provi- 
sions and  lard,  for  years  1888  to  1896  inclusive, 181 

statement  showing  number  and  tonnage  of  vessels  in  the  foreign  trade 
which  entered  and  cleared  from  the  six  Atlantic  ports  during  each 
year  from  1882  to  1896  inclusive,   182 


INDEX  521 

Statistics — Continued. 

table  showing  total  export  of  wheat,  corn  and  oats  from  ports  on  tlie 
Atlantic  coast,  in  bushels,  with  percentages  from  each  port  for  the 

years  1878  to  1896  inclusive, 1^3 

table  showing  exports  of  wheat,  corn  and  oats  from  ports  on  the  Atlantic 
coast,  in  bushels,  with  percentages  from  each  port  for  the  years 

1878  to  1896,  inclusive,   189 

table   showing   recapitulation   of   the   average   percentages   for   the   six 

named  Atlantic  ports  for  years  1878  to  1896  inclusive, 190 

table  showing  exports  of  wheat,  corn  and  oats  from  Boston,  New  York, 
Philadelphia  and  Baltimore  from  1878  to  1S96,  inclusive,  with  per- 
centages of  total  shipments  from  the  four  ports, 191 

table  showing  value  of  all  exports  from  Boston,  New  York,  Philadelphia, 
Baltimore,  Norfolk  and  Newport  News  for  years  1878  to  1896,  in- 
clusive,             I'''' 

table  showing  total  exports  of  provisions,  including  beef,  canned,  failed 
and  fresh;    bacon,  hams,  pork,  lard,  mutton  and  tallo\v,   1892  to 

1896,  inclusive,  at  the  six  Atlantic  ports,   195 

table   showing   exports   of   flour   in   barrels   from   Boston,   New   York, 

Philadelphia  and  Baltimore,  1886  to  1896,  inclusive,    196 

table  showing  total  value  of  imports  of  all  kinds  at  Boston,  New  York, 
Philadelphia,  Baltimore  and  Norfolk,  1878  to  1896,  inclusive,  to- 
gether with  percentages  for  each  port,    197 

table  showing  total  value  of  all  imports  and  exports  through  the  Atlantic 
and  Gulf  ports  for  the  years  1895,  1896  and  1897,  together  with 

percentages,    •, 198 

claim  of  New  York  in  1898  concerning  its  loss  in  exports, 198 

table  showing  rates  per  bushel  by  lake  from  (Chicago  to  Buffalo  and 
by  canal  from  Buffalo  to  New  York  on  wheat  and  corn,  1878  to 

1896,   inclusive,    202 

table  showing  total  rate  per  bushel  by  water  from  Chicago  to  New  York 

on  wheat  and  corn,  1878  to  1896,  inclusive,   202 

table  showing  average  rail  rate  per  bushel  from  Chicago  to  New  York 

on  wheat  and  corn,  1878  to  1896,  inclusive,  203 

table  showing  average  rail  rate  per  hundred  pounds  from  Chicago  to 

New  York  on  wheat  and  corn,  1878  to  1896,  inclusive, 203 

percentages  of  exports  of  grain  by  ports,  1882,  1895,  1896, 219 

comparisons  of  single  years  are  of  no  value, 222,  332 

comparisons  of  averages  more  satisfactory  than  of  single  years, 222 

may  be  marshalled  to  point  to  radically  different  conclusions, 223 

in  1905  warranted  no  definite  finding  concerning  movement  of  exjiort 

traffic, 298 

percentages  of  ex-lake  grain  received  at  ports,  1892-1903  (6  mos.),   •  •  •        322 

percentage  of  exports  of  grain  by  ports,  1878-1903, 333 

ex-lake  and  local  rates  Buffalo  and  Chicago  to  New  York,  1899-1911,  .  .  .        368 
grain  exports,  New  York  and  Montreal,  volume  and  percentage,  1902- 

1910,    370 

grain  exports  by  ports,  percentage  of,  1902-1910, 370 

percentage  of  exports  of  grain  by  ports,  1902-1910,   370 

bearing  upon  historical  facts  only,   391 

percentage  of  import  traffic  through  four  ports,  1909-1911,    392 


522  ATLANTIC   PORT   DIFFERENTIALS 

Statistics — Continued. 

import  traffic,  percentage  of  by  ports  to  diffcroutial  territory, 392 

exports  of  grain,  by  ports,  percentages,  392 

flour,  export,  percentages  by  ports, 392,  393 

exports  of  Canadian  breadstufifs,  in  bond, 393 

percentage  of  westbouiul  import  freight  destined  to,  ainl  west  of,  trunk 

line  termini,   393 

difficulty    in    basing   conclusions    on,    393 

grain  received  and  exported  at  various  ports,  1876,   443 

grain,  including  flour,  received  at  Atlantic  ports  1873-1876,   448 

exports  of  grain  from  different  Atlantic  ports,  1873-1876, 449 

statement  showing  the  receipts  of  oats  and  barley  at  Boston,  New  York 
Philadelphia  and  Baltimore,  1873  to  1876,  inclusive,  and  the  per- 
centage of  such  receipts  at  each  port, 450 

statement  showing  exports  of  wheat  and  wheat  flour  (flour  reduced  to 
bushels)  at  Boston,  New  York,  Philadelphia  and  Baltimore,  1873  to 

1876,  inclusive,  and  the  percentage  of  such  exports  at  each  port,  .  .  450 
statement  showing  receipts  of  wheat  and  wheat  flour  (flour  reduced  to 
bushels)  at  Boston,  New  York,  Philadelphia  and  Baltimore,   1873 

to  1876,  inclusive,  and  the  percentage  of  such  receipts  at  each  port,  450 
statement  showing  the  exports  of  corn  at  Boston,  New  York,  Philadel- 
phia and  Baltimore,  1873  to  1876,  inclusive,  and  the  percentage  of 

such  exports  at  each  port,  451 

statement  showing  the  receipts  of  corn  at  Boston,  New  York,  Philadel- 
phia and  Baltimore,  1873  to  1876,  inclusive,  ami  the  percentage  of 

such  receipts  at  each  port,   451 

statement  showing  the  exports  of  oats  and  barley  at  Boston,  New  York, 
Philadelphia  and  Baltimore,  1873  to  1876,  inclusive,  and  the  per- 
centage of  such  receipts  at  each  port,   451 

Clearing  House  returns  for  ports,  January,  1877,   454 

value  of  foreign  commerce  of  ports,  1876, 454 

Steamships  sailing  from  New  York,  1888, 123 

advantages  of,  at  New  York,    170 

fluctuations  in  ocean  rates  said  to  accommodate,   388 

installation  of  ports-of-call  by,   389 

Storage  Capacity  affects  carrying  capacity, 18 

increased,  at  Baltimore, 18 

at  ports,  1905, 296 

Terminals  :    storage  capacities  at  ports, 296 

capacity  at  ports  for  graiu,  200 ;    ownership  of  elevators,   201 

improved  .facilities  at  certain  ports  have  helped  secure  foreign  trade,.  .  441 

Terminal  Charges,  reference  to,  at  time  of  Differential  Agreement, 167 

lightemge  and,  at  New  York,  referred  to,   167 

lighterage  urged  as  justification  for  differentials  on  grain, 168 

Terminal  Costs,  and  service  at  ports,   216 

if  purpose  of  differentials  is  equalize  cost,  cost  of  placing  grain  on  ships 

must  be  same, 210 

at  New  York  said  to  be  greater  than  at  Boston,  425 

drayage  charge  at  New  York, 422 


INDEX  523 

Terminal  Facilities,  at  New  York,  iinprovenients  in,  17 

improvement  in  at  New  York,  resulted  in  increased  reeei[it.s  of  grain,  ...  J 7 

question  of,  as  bearing  on  interests  of  trunk  lines  and  seaboard  cities,  456 

at  Boston,  Philadelphia  and  New  York  excellent,    457 

reasons  for  tardiness  in  providing  adequate,  at  New  York, 457 

Terminal  Service,  lighterage  at  New  York  as  an  element  of  cost, 292 

loss  in  lighterage  at  New  York, 386 

Through  Billed  Foreign  Freight,  rebate  on  at  Boston,   118 

Through  Bills  of  Lading,  by  Ipke  and  rail,  movement  of  flour  on, 320 

Through  Charges  on  grain  to  Liverpool  via  various  ports,  187G, 441 

Through  Kates,  method  of  fixing  for  cotton,  329;    inapplicable  for  grain,.  .  330 

divisions  of,  not  a  matter  of  public  concern,   364 

must  be  considered  as  a  unit, 154 

lighterage  and  wharfage  charges,  a  part  of,   120 

railroad  control  of,  gradually  becoming  weaker,  1876,    461 

Through  Traffic,  grain  is  most  important  part  of,   435 

exposed  to  competition  of  rival  trunk  lines  and  cities,  437 

general  railroad  management  in  regard  to,   460 

Through  and  IjOCAL  Traktic  of  Erie  Canal,   437 

by  rail,  relative  proportions  of,    436 

Tonnage,  of  Erie  Canal,   1886,    124 

to  New  York,  decline  in,  associated  with  falling  off  of  canal  traffic,  .  .  .  333 

Trade,  course  of,  in  1876,  between  west  and  different  Atlantic  ports, 448 

Transit  Privilege,  grain  moves  under, 368 

Traffic,  what  constitutes  equitable  distribution  of,  as  between  communities 

cannot    be    fixed,     10 

equitable  distribution  of  cannot  be  pre-determined, 11 

distribution  of,  1878-1880,  satisfactory, 14 

constancy  in  distribution  not  due  to  accidental  causes  but  to  certain  laws 

and   conditions,    14 

distribution  of,  governed  by  certain  laws  and  con'ditions,   15 

jiercentages  carried  by  trunk  lines, 16 

distribution  of,  due  to  railroad  competition,   17 

division  of,  at  Detroit  proposed,    19 

division  of,  in  1879,  and  results  of  agreement, 21 

proposed  division  at  source, 22,  23 

percentages  of,  at  seaboard,  26 

to  seaboard,  amount  of,  limited  by  demands  in  west  and  at  Atlantic  ter- 
minals,    442 

difficulties  in  distinguishing  between  "local"  and  "competitive,''   ...  439 

in  grain,  most  affected  by  differentials, 221 

change  in  percentage  of  exports  at  New  York, 206 

movement  of,  differentials  made  with  view  of  influencing, 326 

movement    of,    effect    of    differentials   on,    can    only   be   approximately 

determined, 298 

export,  highly  competitive,   298 

alleged  to  be  diverted  from  New  York  by  differentials,   .  .• 297 

all  does  not  originate  at  Chicago,  165,  291 

to  ports  affected  by  contiguous  territory,   398 

heavy  class  of,  handled  through  Baltimore  and  Philadelphia, 396 

high  class  of,  handled  through  New  York, 396 


524  ATLANTIC   PORT   DIFFERENTIALS 

Traffic — Con  tin  ued. 

volume  of,  as  influencing  low  rates,   386 

division  of,  alleged  to  be  purpose  of  differentials,   385 

grain,  railroads  began  to  compete  with  Erie  Canal  for,  in  1891, 383 

export  and  import  increasing  at  Montreal  in  recent  years,   383 

if  of  large  volume,  can  be  profitably  conducted  at  lower  rates  than  rela- 
tively small  traffic,   127 

east  and  westbound,  differ  in  character,   129 

Transportatjon,  not  a  private  business,  94 

through  rates  of,  to  New  York,  1887, 123 

Trunk  Lines  and  ports,  interests  of,  not  identical, xviii 

interests  of,  and  seaboard  cities  not  always  identical,   443 

interest  of  seaboard  cities  sometimes  at  variance  with,   446 

conditions  under  which  they  engage  in  traffic  between  the  West  and 

seaboard, 440 

control  of,  over  competitive  traffic  growing  weaker  in  1876,   447 

carrying  capacity  taxed  during  portion  of  year  to  full  extent, 15 

are  great  arteries  of  commerce,   22 

links  in  the  through  routes, 23 

rates  of,  must  be  determined  w-itu  regard  to  competition,   23 

not  exclusively  identified  with  any  one  city, 42 

percentages  carried  by,  to  various  seaports,   42 

appointment  by,  of  Advisory  Commission,  67 

Unjust  Discrimination  between  points  may  be  by  carrier,  even  though  it 

does  not  reach  both  points, 424 

United  States,  expenditures  in  harbor  improvements  at  different  ports  by,.  .  217 

Varjation  in  volume  of  exports  between  ports  obeys  no  law,   222 

A^ESSELS,  number  and  tonnage  of,  entered  and  .cleared  at  ports,  1903, 296 

Vested  Right,  claim  of  Boston  in  export  rates  as  low  as  New  York, 108 

Volume  op  Traffic  as  influence  in  securing  low  rates,   386 

increase  in,  shared  in  proportionately  by  the  ports,  1878-1881, 13 

small  fluctuations  in,  1878-1880,  as  between  the  ports 13 

Wars,  railroad,  result  from  failure  to  have  agreement  in  respect  to  rates,  .  .  11 

railroad,  affect  the  carriers  and  as  well  the  investors,   12 

railroad,   affect   commercial   transactions  and   bring   about   unjust   dis- 
criminations,    121 

rates,  do  not  influence  distribution  of  traffic  in,   16 

rate,  unprofitable,   16 

rate,  effect  of,  is  general  reduction  in  revenue 16 

by  railroads,  expensive,   11 

rate,   1870,    9 

rate,  in   1879,    14 

rate,  in   1882,    133 

Westbound  Differentials  not  considered  in  1905, 337 

see  "Differentials." 

Western  Cities,  rates  from,  to  New  York  and  Boston,  1888, 122 

Wharfage,  deduction  of,  before  pro-rating  causes  difference  in  divisions,  .  .  121 

charges  for  at  Boston  paid  by  shippers 118 

Wheat,  not  usually  exported  in  full  eargos,   174 

THE  LIBRARY 

UNIVERSITY  OF  CALIFOjiWA 

LQfi  AI^GELES 


ERRATA. 

Pages  260,  261,  262:    for  "charges"  in  lines  1,  read  ^'changes." 


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